Jeremy Corbyn has taken to social media to criticise the Conservative Party’s “rip off” privatisation agenda. And he doesn’t mess around, taking just one minute to nail everything that is wrong with the sale of public property to private companies, in a video called Another example of rip off Tory privatisation.
“Rip off” privatisation
On Thursday 16 November, Royal Mail Group (RMG) released its half year results [pdf]. And in a video about the Communication Workers Union’s (CWU) claim that RMG paid £68m in dividends to shareholders, Corbyn hit back at what he called the “familiar story of privatisation”. RMG was privatised by former chancellor George Osborne in 2014/15. And Corbyn said that, because of this:
Prices are rising. Staff terms and conditions [are] under attack. Services [are] being cut. And it’s shareholders who reap the rewards.
— Jeremy Corbyn (@jeremycorbyn) November 16, 2017
The Canary has been documenting Corbyn’s assertion that RMG workers’ “terms and conditions [are] under attack”. The CWU has been in a protracted dispute with the company over changes to its pension scheme.
But in a sting in the tail for CWU members, RMG also revealed in its half-year results a tax rebate of £106m, for closing the disputed pension plan. And it’s not the first time the company has disgruntled the CWU. Because a delve into RMG accounts reveals that, as with many corporations, it’s one rule for the bosses and another for the workers.
One rule for the bosses?
RMG Chief Executive Moya Greene earned £1.88m (including shares and bonuses) in 2016/17 [pdf, p78]; up 22% on the previous year. Meanwhile, RMG’s other Executive Director Matthew Lester (who has since quit) got a 4.6% basic pay rise in 2016/17 [pdf, p78] compared to frontline staff who had to make do with just 1.6%. This was while the annual CPI inflation rate to the year ending April 2017 was 2.7%.
Meanwhile. RMG’s biggest reported [pdf, p86] shareholder is Blackrock at 5.5%. The investment management firm counts former chancellor George Osborne among its executives, and shareholders include Tory peers Lord Glendonbrook, Lord Leigh and Baroness Noakes.
Workers of the world
But in reality, and ironically, the largest group of shareholders is actually RMG’s own employees, CWU members, who own a 12% stake in the company between them [pdf, p6]. They are, however, classed as individual investors.
RMG told The Canary:
Alongside RMG’s proposal for the best pension scheme in the industry… we are making a very good offer on pay.
We know how important pension benefits are to colleagues. We have never hidden the fact that benefits members build up in the future will be smaller than they are now. That is because, unfortunately, the Plan in its current form is unaffordable. If no changes are made, contributions to the Plan would more than double in 2018, from around £400m a year to £1.26bn a year.
We estimate that Plan members, who take the maximum tax-free lump sum at retirement would see an average reduction of 17% compared to current Plan benefits.
You can read RMG’s full statement on the pensions row here.
This situation with RMG is yet another tale of a once proud and publicly-owned organisation falling foul of the Conservative government’s reckless privatisation axe. And Corbyn is right. We should all support our “local postal worker” and the CWU. Because with the Tories, you never know where the axe will swing next.
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