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Defending public postal services, learning from the privatization of Royal Mail

The governments of Stephen Harper in Canada and David Cameron in the United Kingdom have been steadfast ideological allies on a number of issues including the Canada-European Union free trade agreement, the European Fuel Quality Agreement, Big Society austerity measures, the tar sands, and fracking.

And now it appears we can draw a parallel between Cameron’s privatization of the Royal Mail and Harper’s actions against Canada Post.

The Royal Mail is responsible for universal mail collection and delivery in the United Kingdom. It was originally established in 1516. For most of its history, Royal Mail has been a public service operating as a government department or public corporation. But following the Cameron government’s Postal Services Act, the majority of shares in Royal Mail were sold on October 15, 2013 on the London Stock Exchange.

Earlier this month, a postal worker wrote in the Guardian, “Even before privatisation profits were increasing. Pre-tax profits were £233m for the six months to 29 September, up from £94m a year earlier. This was all within the public sphere, so no one can pretend that privatisation had anything to do with it. In other words, everyone knew that there was a bonanza on its way. The real point of privatisation, it seems, has been to allow the private sector to cash in on it.”

The Guardian has also reported, “The union (the Communications Workers Union), which opposed privatisation, rejected an 8.6% pay increase over three years and a lump sum payment of £300 in July. (This offer by the Cameron government was seen by the union as a way to win over the workers and as a ‘sweetener to swallow some very bitter pillls’ including privatisation and damaging changes to pensions and working conditions.) It wanted a legally binding agreement to provide protection for jobs, pay, pensions and union representation under new ownership. …(By December), Royal Mail and the Communication Workers Union (had) reached a settlement on workers’ terms and conditions at the recently privatised company.”

This December, Canada Post announced it intends to end the door-to-door delivery of mail in urban centres, eliminate up to 8,000 jobs, and increase the price of stamps from 63 cents to 85 cents (when purchased in bulk) for a standard letter.

This despite the fact, as noted by Ethan Cox in the National Post, that, “Canada Post has recorded a profit in 17 of the last 18 years, and in 2010 recorded a record high profit of $443-million. The one year it failed to record a profit was 2011. In that year it was strikes and a lockout, the loss of a court case related to pay equity and a recalculation of its pension plan’s liabilities, not declining mail volume, which led to the loss. Since then costs are down and sales are up. Far from being publicly subsidized, Canada Post is a profitable corporation which has returned over $1.5-billion to the taxpayer in the past decade alone.”

Council of Canadians chairperson Maude Barlow has commented, “This is yet another case of a Harper-driven impoverishment of an essential service. It will negatively affect seniors, people with disabilities and other Canadians who rely on the mail. It will cut donations to charities and non profits at a time they are struggling. And it will set Canada Post up for privatisation down the road. Harper has given massive tax breaks to corporations and the wealthy and removed from the public purse all the money we need for this and other services.”

Further reading
Barlow condemns Canada Post cuts announced today
British prime minister calls for quick signing of CETA, more tar sands
UK, Netherlands reportedly backing Canadian opposition to the European Fuel Quality Directive
Harper to bring Big Society austerity measures to Canada
Is Canada opposing the European directive against fracking?
UK PM Cameron should stop defending Harper’s tar sands policies
Canada’s High Commissioner to the UK backs CETA, tar sands, austerity measures