The costs of the postal strike

Postmen will go on strike next week in what could be the first of many walk-outs. Sarah Brealey looks at what it will mean for us, while a Norwich postman adds his view.

From the grandmother at home waiting for tidings of friends and relatives, to the largest business, few will be unaffected by the national postal strike.

Even in the age of internet and email, all of us rely on the network that brings letters and parcels to our door, at home and at work. We may not make use of it every day, but when we do need it we certainly like to know it is there.

That confidence will be eroded when the first of what could be a series of national strikes by the Communication Workers Union (CWU) gets under way next week in a dispute over the Royal Mail's pay and modernisation plans.

There has already been local action around the country, including in London on Wednesday.

Now mail centre staff and drivers will walk out next Thursday for 24 hours, followed by delivery and collection staff, who will walk out for 24 hours on Friday.

It will mean two days of disruption and the knock-on effects will last for longer. And although most can cope with one or two days of missed post, the spectre of a series of strikes over the next few months, especially in the crucial pre-Christmas period, will worry many.

The consultancy Post-Switch estimates that two or three days of a national strike would cost Royal Mail almost �120m. And the cost to the wider economy would be much greater. Week-long industrial action - which is not on the cards at this stage - could cost the UK economy �1.5bn, including a loss for online retailers of �220m.

The worst affected will be small businesses, who do not have time or the size of postal contracts to make it worth transferring their elsewhere. The Federation of Small Businesses says that 80pc of its members rely on the Royal Mail. In many cases their cash-flow will be affected as customers say: 'The cheque's in the post'. Rival delivery companies were warning last night that they do not have the capacity for a sudden spike in business.

And it is not just cheques that will be affected - driving licences, credit card bills and applications for secondary school places could all be caught up in a backlog. The Patients' Association warned that hospital appointment letters may also be delayed, along with results of medical tests.

Rural businesses are in a double-bind because many areas lack a swift broadband service needed to make full use of the internet.

Country Land and Business Association (CLA) eastern region director Nicola Currie said: 'Farmers have to fill in a myriad of forms for the government which can take hours to download and then return if they haven't a good, fast broadband. They are forced to use the mail instead and frequently there is a tight time-scale.'

Norfolk's branch of the CLA is warning that tourist operators will be among the rural businesses worst hit. John Pugh, CLA regional tourism spokesman, said: 'Undoubtedly a strike will create enormous difficulty for cash flow - and if it continues could see some go out of business. Christmas and New Year bookings represent very important income for tourism.'

Last night the CWU blamed Royal Mail for rejecting their offer, while Royal Mail said the union was making an 'appalling and unjustified attack' on customers.

Dave Ward, CWU deputy general secretary, said: 'Our offer included the opportunity for a three-year deal that would bring stability to customers, business and the workforce. This industry is crying out for stability and yet Royal Mail rejects out of hand a genuine attempt to deliver it.'

A Royal Mail spokesman said: 'The changes Royal Mail is making have already been successfully made by our people in most parts of the UK. Royal Mail faces an absolute need to modernise and improve its efficiency and ensure it can continue providing the one-price-goes-anywhere universal service.

"The changes we've been making are fair and reasonable and were agreed with the union in 2007. We are asking that people work flexibly and for the hours they are paid for. We are investing in new equipment for our people to help them do their job as effectively as possible.'

Royal Mail itself will suffer from the strike as people find alternatives. While letter volumes have been falling in recent years, parcels have been booming thanks to a rise in internet businesses, from Ebay to Amazon to film subscription services. But some of those who sell their clutter on Ebay will turn back to car boot sales.

More seriously, big businesses are already turning elsewhere. With Christmas looming, the major companies do not want to risk delays at their busiest time. Amazon, Royal Mail's second-largest customer, is reported to have awarded one of its contracts to Home Delivery Network. John Lewis said this week that it will be moving away from Royal Mail until the strike action was resolved.

If Royal Mail loses its biggest customers, then its long-term future will be put in doubt. It is hard to see how there can be any winners in this dispute.

A postman's view

Richard Raymond, 46, is a postman based at the Roundtree Way delivery office in Norwich.

He has delivered post in different parts of Norwich in his two years as a postman, and currently delivers around Drayton Road. He says he and his fellow postmen are fed-up by the increasing workload and lack of pay rises - but believes that the public do not understand why they are angry.

Mr Raymond, a father-of-two who lives with his 17-year-old daughter on the Heartsease estate, said: 'I was a scaffolder before this, but this is much harder. The bags we carry are not supposed to be over 16kg because of health and safety, and less after the second bag, but if they weren't heavier we would never get the job done. They weigh 18, even 20kg. We walk five miles on our rounds and you have to keep your satchel of mail with you at all times.

'All of us are getting more and more work with no wage rise. The night staff have been laid off, so there is more for us to do when we come in. There is more post then ever, a lot of it heavy things like catalogues. So much of it is junk mail and computer-generated mail which ends up in the bin. It is soul-destroying.

'The holdalls are rubbish and fall apart, the uniforms are no good, the raincoats aren't breathable so you end up soaked in sweat. You have to wear Royal Mail boots, but they are slippery.

'We used to be able to go home early if we finished early, but it was only because we were racing around and breaking our backs to go home early. Now they want us to race around and go back to do some more work.

'I have to cycle seven miles there and back with the mail to start my round. You are not allowed to put the post in the back of your car. They said they were going to get vans and put two of us in a van to save time, but there is no sign of any vans.

'The Norwich branch has had more modernisation than anywhere in the county. We signed up to a lot of agreements to make us quicker, faster, stronger. But they haven't done all the things they agreed to. There are supposed to be machines for sorting to save us time, but we have only got half the machines. We still have to do half the sorting.

'Even if you drop elastic bands regularly you can be sacked. All these pressure points are needling us all the time.

'I realise the strike will inconvenience people, but what about our wellbeing? We look after everyone and no-one looks after us.'

What is the dispute about?

The word 'modernisation' is being bandied around in this dispute like mistletoe at a speed-daters' Christmas party. But although both sides agree that it is needed, they each have different views about what modernisation is.

In 2007 Royal Mail and the unions signed a Pay and Modernisation Agreement. The agreement is still being implemented, and disagreements about how this is happening are at the heart of the current dispute. Royal Mail says postmen should work the hours they are paid for, which has not always happened in the past. The union wants to see pay rises for the next three years, and more cash in the pension scheme to help plug a shortfall of �6.8bn.

The background is that Royal Mail has been hit hard by an opening up of its market to competition. The government has allowed rivals, such as TNT, UK Mail, and Citypost, to collect letters and parcels from companies, sort them and take them to Royal Mail for delivery over the last mile. Some inside Royal Mail say this allows rivals to take the profits while leaving the most time-consuming and unprofitable bit of the operation to them. Royal Mail currently collects 60pc of business post.