Post strike prompts break in monopoly

The Government last night suspended the Post Office monopoly for the first time in a quarter-century, after five 24-hour strikes were announced.

The first stoppage went ahead from the early hours today after the Communications Workers Union (CWU) said negotiations with management had reached an impasse.

The union condemned the suspension as "coming close to outlawing postal strikes in the UK", but Ian Lang, the President of the Board of Trade, said he had made it clear he would act.

The industrial action left him with "no alternative but to seek as far as possible to protect the interests of the businesses and domestic customers".

Blaming union leaders for the continued dispute, he said: "It is wholly unacceptable that a group of extremists within the CWU are able to hold the country to economic ransom. It is simply wrong for a public service monopoly to behave in this way."

The suspension will open the way to rival courier and parcel firms to enter the market for the next month. The period could be extended for a further three months if no resolution is achieved.

Under Government rules, private firms are forbidden to charge less than pounds 1 for delivering an item, effectively ruling them out of the domestic market for letters.

Mr Lang's decision was met with "sadness" from the Post Office, which sought to blame union leaders for refusing to allow members to vote on its latest offer.

John Roberts, Post Office chief executive, said CWU leaders had reached a settlement which would give postal workers job security, a shorter working week, better pay and training and longer holidays.

"But the union executive, which is clearly in disarray, is refusing to put it to their members.

"Royal Mail is being asked by employees from all around the country why they are not being asked to vote on the deal."

The package was still on the table, but further strike action would make it "increasingly difficult" to sustain, Mr Roberts said.

He added: "A longer suspension of the monopoly could lead to a loss of business, a further rise in postal prices, and the undermining of the universal postal service. That would have very serious consequences for jobs and for every employee."

But Alan Johnson, CWU's joint general secretary, refused to accept the blame for the loss of the monopoly and criticised the Royal Mail for refusing to reopen negotiations.

"I don't think there is a hope of any imminent settlement of this dispute, given the attitude of the Royal Mail management," he said.

Team-working is the main sticking point. It involves post workers, many of whom earn less than pounds 10,000 a year, taking some responsibility for self-management.

Reaction from alternative parcel carriers was muted. Colin Beesley, of UPS, said: "If the monopoly were to be suspended, it is likely that the more lucrative business mail area would be the key target for competition. Consumers would almost inevitably suffer."