Royal Mail staff vote for industrial action

Union leaders are today expected to threaten nation-wide postal strikes when they announce a vote in favour of industrial action by 150,000 Royal Mail workers.

The Communication Workers Union will try to use the ballot result to reinforce its demand for an above-inflation 5 per cent pay increase at a time when Consignia, the Royal Mail's parent company, is shedding up to 30,000 jobs.

Union officials have held two weeks of talks at the conciliation service Acas with management, which has offered a 2 per cent wage rise. The company insists that it cannot afford to meet the union's demands when the state monopoly is being opened up to competition from the private sector.

If there is no breakthrough in the talks, the union executive is expected next Tuesday to call for 24-hour stoppages. By law, officials will have to call the strikes within 28 days of today's ballot result. The union is legally bound to give Consignia seven clear days' notice of disruption, so the first walkout could be next Thursday.

Management is concerned that a third of the Royal Mail's £5bn postal monopoly will be open to rivals this April, with the entire market opened to competition from 2006 under the industry regulator's proposals.

Consignia has warned it means "death by a thousand cuts" and the union said it could spell the end of the universal service, which guarantees deliveries to every address in the country at the same price. Graham Corbett, chairman of the regulator Postcomm, rejected the fears expressed by Consignia and the unions and said the Royal Mail should be able to withstand competition without jeopardising services.

Management and unions are aware the pay talks are taking place amid unprecedented change for the state-owned corporation. Nevertheless, the union executive has rejected the £60m pay package and reiterated its claim for a 5 per cent rise, arguing that management was calling for wholesale changes in working practices.

John Keggie, union deputy general secretary, wants to increase the basic wage to £300 a week by October 2003 from the present £250.45 and said he was "extremely confident" of a "yes" vote. "We don't want a dispute, we want a negotiated settlement but management are refusing to meet our claim with money up front," he said. "The offer is completely unacceptable. It is a pittance."

The union threatened action before Christmas over the possibility of 30,000 redundancies but accepted assurances from management that it would try to ensure there would be no compulsory redundancies.

Mick Linsell, Royal Mail's managing director for service delivery, said he was "bitterly disappointed" at the union's decision to seek a mandate for strike action because there was scope for further negotiation. He said the offer was already above the inflation rate and would be increased to 2.5 per cent if service targets were met.

Mr Linsell said Consignia's interim results for the first half of 2001-02 showed it had incurred a £281m loss. "There is simply no cash for extravagant pay awards," he said.