BETRAYAL OF THIS UNIQUELY BRITISH COMPANY
Of all the state enterprises that have passed into private hands since the Thatcherite revolution of the 1980s, only one has the privilege of having ‘Royal’ in its corporate name.
The Royal Mail is not just Britain’s national postal service, with a heritage dating back to the 16th century. It has the exclusive franchise to design, print and distribute Great Britain’s postage stamps, with the Queen’s head always present even on commemorate issues.
The glittering Crown and ER (Elizabeth Regina) is an integral part of the company’s logo and adorns post boxes, postal delivery trucks and sorting offices up and down the country.
The very idea that this uniquely British company should be run by an overpaid German who lives in Switzerland is extraordinary.
This isn’t jingoism on my part. This country long ago came to terms with the idea that the best people, wherever they come from, should be recruited to top jobs. Rico Back’s predecessor as Royal Mail boss, the feisty Moya Greene, moved all the way from Canada to guide the business from government ownership into the private sector.
She made her home in Britain, becoming part of the establishment as a trustee of the Tate gallery among other things. for Rico Back to choose to live in Zurich for family reasons, because of his youngest child’s schooling, shows a lack of respect for this country and the brilliant education choices on offer.
It makes him culturally unsuitable to be chief executive of the Royal Mail. And it also leaves open questions about his tax affairs even though the Royal Mail insists that he will pay British taxes on his chief executive salary and bonuses.
WHAT is even more extraordinary is that a feeble Royal Mail board, chaired by former package holiday king Peter Long, signed off Herr Back’s living and financial arrangements. Indeed, in one of the most egregious decisions made by a publicly quoted company, the Royal Mail consented to a £5.8m ‘golden hello’ for Rico Back even though he was already an employee of the group through the GLS European parcel delivery service.
It is bad enough when highpowered executives demand what is effectively a transfer fee for moving from one company to another, especially when they will be getting a high salary. But the public, paying 67p for a first-class stamp, will be horrified to learnthat the Royal Mail is paying out millions simply to move a boss from part of the company to another. A relocation fee might be understandable, but paying out the remains of Back’s contract, when he is already an employee, tramples over business convention, and would be frowned upon in corporate governance circles. Personally, I was always a huge supporter of Royal Mail privatisation on the grounds that removing the dead hand of government would allow the group to modernise, innovate and adjust to the digital age. The fact that the privatisation was bungled with too low an offer price, and investment banks including Goldman Sachs were able to enrich themselves and their clients while ordinary investors were frozen out was a disgrace. It was heavily criticised by the National Audit Office.
Now we learn that a culture of unfettered greed has swept through the organisation. As well as his golden hello, Rico Back is to receive a base salary and bonuses which could reach £2.9m a year. His total remuneration package amounts to more than a hundred times that of the average postal worker, who takes home £28,274.
That can only serve to antagonise a highly unionised workforce which in recent years has seen many thousands of jobs lost to modernisation, and been forced to accept reductions in their defined salary pensions. Not surprisingly, the Communication Workers Union has already has condemned the arrangements as ‘obscene’. The proposals have also drawn the ire of major shareholder advisory groups which are threatening to vote them down at the Royal Mail AGM today.
Rico Back was chosen for the job because the GLS offshoot, which runs a Europe-wide commercial parcel service, has been very successful in an age of online shopping. But running a national postal service is a very different proposition. In the case of the Royal Mail, standards of customer service have been allowed to deteriorate, while the basic costs remain high because of the legal requirement to offer a universal service.
THERE must be far-reaching questions as to whether someone who has operated so far from the front line of delivery services in the UK is the right person for the job.
What is absolutely certain is that no other national postal service in the world would even consider handing the keys of a domestically focused business to someone living overseas, with limited knowledge of the status the postal service has in all of our lives.
Cutting the Royal Mail loose from the stays of public ownership was always the right thing. But the British people did not sign up to a privatisation which threatens to destroy core customer service and drives a coach and horses through best governance practices.
Once again, the worst excesses of free market capitalism are playing into the hands of Jeremy Corbyn and the political Left.