Vince Cable plans new attempt to privatise Royal Mail

Post by **TrueBlueTerrier** » 19 May 2010, 20:00

http://www.guardian.co.uk/uk/2010/may/1 ... ation-plan" onclick="window.open(this.href);return false;

Business secretary determined to press ahead with Royal Mail restructuring, risking stand-off with union

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Tim Webb and Zoe Wood
guardian.co.uk, Wednesday 19 May 2010 19.54 BST

The government is preparing another attempt to privatise Royal Mail.

Vince Cable, the business secretary, is determined to press ahead with a restructuring of the group, potentially leading to another stand-off with the Communication Workers Union.

Cable has asked Ed Davey, his fellow Liberal Democrat and parliamentary under-secretary of state at the business department, to prepare the plan in detail.

It is understood that Cable believes that while Royal Mail remains in state ownership it cannot compete in a liberalised postal market. He is mindful that Labour's attempts to privatise the postal operator, led by his predecessor Lord Mandelson, failed last summer following a backbench revolt by more than 120 Labour MPs and a campaign by the CWU.

Unions and other campaigners argue that Royal Mail, as a provider of an essential public service, should remain in state ownership. The Lib Dem election manifesto said they would sell 49% of Royal Mail to free up funds for investment in the business. Employees would own half of the remainder in a trust and the government would keep the rest.

It is thought the Lib Dems believe that such an employee trust would help smooth the way for the privatisation, although the CWU is likely to oppose this. The Conservatives had advocated a straightforward sell-off of Royal Mail.

Work has begun to find common ground between the two approaches and the details will emerge over the next few months.

But politicians and Royal Mail itself are aware of the pressing need to put the group on a stable footing. Royal Mail's pension deficit is expected to be formally revalued at £10bn next month, when its pension trustees must present to the government a "recovery plan" demonstrating how the deficit can be plugged. Royal Mail cannot afford to fill the gap itself, although the pension trustees may propose a temporary solution.

The government is likely to offer to meet workers' retirement benefits if privatisation goes ahead, as Mandelson did last year. A majority of Tory and Lib Dem MPs back some form of privatisation, cancelling out any potential Labour opposition.

Royal Mail is expected to post a fall in annual profits as a result of the nationwide and local strikes last year.

The company made an operating profit of £184m in the first six months of the year, up slightly on the previous year. But the industrial dispute over Royal Mail's modernisation which led to national walkouts last autumn, dented profits in the second half, the group is expected to say.

The last three months of the financial year, which ends in March, saw an improvement in performance after the CWU and management agreed to work together in modernising the business. Royal Mail is still searching for a new chief executive after Adam Crozier left to run ITV last month. The group, which has appointed headhunting firm Egon Zehnder to lead the search, did not expect to select a new chief executive until the outcome of the general election – and the new government's plans for Royal Mail – became known. It is being run by chairman Donald Brydon in the interim.

kendo1 · Post by **kendo1** » 19 May 2010, 20:20

I see RM privatisation a great idea on paper but not in reality.

I understood the reason it never got sold previous was the buyers were not prepared to pay the asking price or anywhere near it !
I think the same will happen again .

Broxi51 · Post by **Broxi51** » 19 May 2010, 20:40

It would be tempting to just agree to privatise RM and watch Billy & Dave turn purple after they sold us a lump of sh*t but unfortunately I think privatisation is a cr*p thing for the general public.

maisymoo04 · Post by **maisymoo04** » 19 May 2010, 21:55

the goverment have no power to private us its a EU comm considering we voted NO to it god help us

Bouncing Souls · Post by **Bouncing Souls** » 19 May 2010, 21:59

This is quite a strange one for Cable and his Tory paymasters, Lib Dems want to sell off (49%) the Delivery/mail centre part but keep Post Office Counters in full public ownership, the Torys want to sell the whole lot off 100% (Royal Mail, ParcelForce, Counters, etc etc) but the the new owner cannot break up the company (according to Ken Clark)
I can see the same problems happening as before, TNT are looking at selling off their mail division, so would they be interested in Royal Mail? plus they would have to probably sell off some of their own assests to comply with the merger commision, DHL as TNT, or would it be a full blown merger between the 2 companies? That leaves CVC the private equity vultures, would they be interested in the full take over seeing as they would be bound by a no break up clause? i.e can't hive off the delivery side and keep the mail centres.

I think that we will be private by the end of this year, the few billion they would get from a full sale will make a small dent in the counries debt and thats how they see RM, a quick one off sale to help ease the finances, and then the burden of RM becomes someones elses problem.
A strong union is what we need in the coming months, whoever the new owner is, they'll be after your T+C's first

ruralpostie · Post by **ruralpostie** » 19 May 2010, 22:53

I agreed and voted for the new deal and felt considering the economic situation it was very good and fair, despite idiots in my office mumping and moaning about it!!...But it seems like anything else too good to be true and short lived, and all this "new" relationship with my manager and new levels of co-operation between the CWU and RM...Yes... I can see THAT changing in the coming months !!... Looks like we'll be setting up a picket line again.... and really can't see the public supporting us too much, but it's like anything else you wont miss it till it ain't there!!!...Everything that's good and working in this god forsaken country is sold off just to make money...If it ain't broke don't fix it!!!...

I knew soon as the Conservatives/libs got in we would be there 1st target...I think we're in for a bloody fight here lads and an example will be made off us

...and I'm sorry to say I fear the worst!!!

Si67 · Post by **Si67** » 20 May 2010, 00:12

I fear your right ruralpostie.. Get the f**k out while you can! Things can and will only get worse now!! If you want to be a TNT paperboy on TNT paperboy money then fine!! Otherwise go-go-go...

terrace · Post by **terrace** » 20 May 2010, 05:53

http://www.guardian.co.uk/uk/2010/may/1 ... ation-plan" onclick="window.open(this.href);return false;
Business secretary determined to press ahead with Royal Mail restructuring, risking stand-off with union.

borders · Post by **borders** » 20 May 2010, 08:09

Yep , here we go again, this time i fear they will have a better chance of succeeding. found this reply to Roy Mayall's article sums it up really...

thetowncrier
17 May 2010, 6:48PM
"Quite why I don't know, but this article omits the single most important fact that anyone considering privatising the Royal Mail should know: it makes a profit. Not only that: the Royal Mail makes a very tidy profit indeed, and looks set to continue making a profit for the foreseeable future. In 2007/8, the company made £162m. In 2008/9, it made £255million, more than £900,000 day. Last year, Royal Mail made a whopping £321m, thanks largely to the greed of its managerial class it has to be said, who burdened workers with increased workload while at the same time freezing their pay.

Nevertheless, why anyone in their right mind would consider privatising an institution which actually makes the British taxpayer money, when the whole world seems convinced public services have to 'make' money in order to avoid the cut, is beyond me. Why anyone in their right mind would consider privatising an institution that not only makes us, the taxpayer, money, but also provides us with a steady, affordable and accessible service, is also beyond me.

But then I remember why things are privatised in the first place. It is not about morality, 'modernisation' (whatever that means) or even economic 'sense'. It is about theft: systematic organised theft of public (that is, our) assets. The Tories, who presumably represent a few 'interested parties' eager to pick the bones clean from the carcass of the Royal Mail if (or more accurately, when) it is privatised, will sell off the Royal Mail for less than half its worth. It will then be run into the ground by a company or set of companies that will (A) raise prices for customers, (B) reduce rights and pay of workers, and (C) reduce the quality of service in the interests of making more money.

We will have, in short, an equivalent of First Capital Connect as one of our major communications industries, which will resemble a dysfunctional, profiteering behemoth interested in one thing and one thing only: making profit. And what will we get in return for this? A one-time cut-price 'offer' that could be equalled in a few years' service, in addition the more worrying extra £300m a year to make up in lost profits, which will then need to come out of our taxes. In other words, not only will we lose the service that we use and rely on, we will also lose the profit it makes us each year, making privatisation the most imbecilic, short-sighted and downright ridiculous piece of greed I have come across in recent years".

bandit650 · Post by **bandit650** » 20 May 2010, 08:44

You were quite right to put the towncriers piece in boarders as what has been pointed out is true,i feel sad that so many people see selling Royal Mail of as the answer to the poor service,how very short sighted of them,as for the Southampton member of staff pointing out that most of the sorting is done over night with the new machines i feel that member of staff lost the point of what was being said in the letter,in delivery offices all the over night sorting has been taken out,the only other thing that surprised me was the lack of peoples knowledge to do with delivery of mail,one guy pointed out that he should not have to show ID when picking up his parcels as they are his property,oh well,i feel that it will be a very sad day when the service that was designed for all to use will be sold of for a small amount of money and become worse than it is now and it wont be known until it has gone what a massive mistake it has been and as for we need a strong union i am not sure that is gonna happen either.

borders · Post by **borders** » 20 May 2010, 09:34

yes Bandit , it is a good post. one thing he does not mention is jobs. royal mail as a public service creates jobs. reasonable jobs with reasonable pay and conditions. maybe it can be argued , that is not the case so much anymore but what the ordinary person wants is reasonable jobs.the future working for a privatised RM conjures up the complete opposite to me, a working contract devoid of any concessions ,the bare minimum . i may be wrong but i feel we are entering a period whereby the Capitalist Class will be able to pit one working person against another and our desperation to keep our jobs will in effect drive all of our pay and conditions back down.

BELIAL · Post by **BELIAL** » 20 May 2010, 09:38

But on the bright side ,that'll be DSA f****d

Post by **Wessex** » 20 May 2010, 11:57

How is the Union going to motivate members to strike again I cant see it happening.The only thing they can do is argue the case as in the Keep it Public campaign.

Post by **pcb** » 20 May 2010, 11:59

The system we live in calls for privaisation because of the perception given off by the right wing press over the decades that RM is old outdated and needs privatising. The right wing within this country seem to relish the fact that public institutions (built by tax payers) should be handed over to privateers and then we all gain! However as with all public institutions privatised its only a small number of people who really gain. We, the workers (the public) end up paying more every time!

We are then sold the adage that our pension funds would suffer if this did not happen!

It seems to me that we will campaign against this but with the CONDEMs

in charge the left in the labour party will not be able to fight it!
What happens next?

The share issue is the one thing that will in the end be used to placate posties. What will happen is that shares will be dangled in front of some posties who will think only of the short term gain.

We have to be on the ball about this.

Moving forward we should ensure that any shares are pooled together and used as leverage (play them at their own game).

fishtank · Post by **fishtank** » 20 May 2010, 12:13

pcb wrote: Moving forward we should ensure that any shares are pooled together and used as leverage (play them at their own game).

Non-Voting Shares
The purpose of non-voting shares is to allow the holders of the ordinary shares to maintain control. The holders of the ordinary shares may be founders of a company, the existing shareholders of a company that wishes to list, a company that wants the benefits of an employee shares scheme without the existing shareholders losing control.

ROYALMAILCHAT