Rebel MPs undermining Royal Mail, says minister

[TrueBlueTerrier]

http://www.guardian.co.uk/uk/2009/feb/1 ... ion-labour" onclick="window.open(this.href);return false;



Labour backbenchers opposed to sweeping reform of the Royal Mail could undermine one of its most cherished services, the post office minister Pat McFadden warned yesterday.

He told 130 rebels that they must accept part-privatisation or face seeing the postal service's commitment to affordable universal service downgraded, including the abolition of Saturday deliveries.

He disclosed that Royal Mail's letters business was set to lose 8% of its traffic this year, and that much of this decline was due to failings in the business, not simply a result of the recession.

McFadden said: "I do not think there is a full appreciation of the problems being faced by Royal Mail. Its pensions deficit is 75 times its profits. Mail volumes are falling by 7 or 8% a year, and it has not automated or modernised as much as other companies. We cannot just hope it all goes away".

McFadden's remarks outlined the consequences of rejecting plans to give a minority private sector stake in the Royal Mail. The business secretary Lord Mandelson is determined to press ahead.

The 130 Labour MPs have signed an early day motion opposing a private sector stake and are pressing the whips to lobby Downing Street to have the issue shelved until after the next election.

Privately ministers are suggesting concessions could be made if the Communication Workers Union, and their backbench supporters, abandoned their campaign. McFadden is willing to guarantee a more sensitive regulatory environment, a review of the charges Royal Mail can impose on private contractors and the possibility of a memorandum on no compulsory redundancies.

Ministers are also willing to give an undertaking that a majority stake in the Royal Mail could not be taken without further legislation.

There is concern in Westminster that the debate is obscuring the scale of the problems facing Royal Mail. A review last year, chaired by the former Ofcom deputy chairman Richard Hooper, warned that the universal postal service - the ability to deliver to 28 million businesses and homes in the UK - was under threat.

One of the main burdens is the Royal Mail's pension fund deficit of between £7bn and £9bn. The business is also facing intense competition. Liberalisation of the letters market has meant rivals have taken an increasing share of collection and sorting - especially for corporate mail, which accounts for around 85% of the market.

More worryingly in the longer term, the letters business is suffering with many people switching to email and text messages. The switch to new technologies is estimated to have cost Royal Mail some £500m in its last financial year.

A further challenge is ownership. The Hooper review suggested Royal Mail should recruit a strategic partner which would be allowed to take a minority stake in the bulk of the group - though not the Post Office network. The Dutch group, TNT, has expressed interest.

The proposal was seen by critics as privatisation by the back door, sparking the opposition of the CWU and MPs.

The government has given Hooper its blessing. Unveiling the report last December, Mandelson said: "The government agrees with Hooper's recommendations. We share his ambition for a strong universal service and strong Royal Mail."

[borders]

is anyone denying that Royal Mail have many problems as mentioned in this article ? what i dont understand is why cant the Government help RM out and secure its future [like it has tried to do with the banks ] . why cannot RM sort these problems out as a public company , why do we need to be part- privatised. has the private sector got such a fantastic record ?

[borders]

Mr Darling said allowing HBOS to collapse would have had knock-on effects for all of Britain's banks.

"If we had not intervened... the banking system would have gone down, taking millions of families, millions of businesses with it. No responsible government could have done that," he said.

intervene in RM ,then Mr Darling , why not create a great public service run for the benefit of everyone !!

[dvbuk55]

Mr Darling said allowing HBOS to collapse would have had knock-on effects for all of Britain's banks.

"If we had not intervened... the banking system would have gone down, taking millions of families, millions of businesses with it. No responsible government could have done that," he said.

intervene in RM ,then Mr Darling , why not create a great public service run for the benefit of everyone !!

Because unlike the Banking system there are no fat cats bleating in the wings still expecting a huge bonus for failing, like Crozier, even the FSA are expecting to spend 33million on bonuses and they are the ones who were supposed to regulate the banks - they don't produce anything and they failed miserably - maybe it is time for a change of great magnitude - this is not a healthy society.

[Big Daz]

He disclosed that Royal Mail's letters business was set to lose 8% of its traffic this year, and that much of this decline was due to failings in the business, not simply a result of the recession.

[banner18]

is anyone denying that Royal Mail have many problems as mentioned in this article ? what i dont understand is why cant the Government help RM out and secure its future [like it has tried to do with the banks ] . why cannot RM sort these problems out as a public company , why do we need to be part- privatised. has the private sector got such a fantastic record ?

Because it is illegal under state aid regulations that our short sighted Government rushed to sign up to. I don't know why they can't just allow RM to increase DA prices to cover the true cost of the USO. Is it so hard to see the correlation? No amount of machines, private capital or private management will alter the cost of sending a man out to every door in the land, every day. It's not rocket science really.

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Mr Darling said allowing HBOS to collapse would have had knock-on effects for all of Britain's banks.

"If we had not intervened... the banking system would have gone down, taking millions of families, millions of businesses with it. No responsible government could have done that," he said.

intervene in RM ,then Mr Darling , why not create a great public service run for the benefit of everyone !!

Because unlike the Banking system there are no fat cats bleating in the wings still expecting a huge bonus for failing, like Crozier, even the FSA are expecting to spend 33million on bonuses and they are the ones who were supposed to regulate the banks - they don't produce anything and they failed miserably - maybe it is time for a change of great magnitude - this is not a healthy society.

exactly what i was thinking

[fmrPOSTIE]

Who says its illegal under state aid rules? I doubt whether the EU are gunna block this - all past attempts from private carriers have been rejected!

What gets on my tits is the Minsiter hasn't even got the guts to mention the "P" word. This is part-privatisation, but they are scared of the banckbench implications. As soon as a minority stake is sold it will no longer be in the public sector, im sorry. Look at National Air Traffic Services (NATS).

The phrase being banded about now is "Majority Public Ownership"

[shelanda]

http://www.guardian.co.uk/uk/2009/feb/1 ... ion-labour


The government has given Hooper its blessing. Unveiling the report last December, Mandelson said: "The government agrees with Hooper's recommendations. We share his ambition for a strong universal service and strong Royal Mail."

How blinkered are they how can it be a strong Royal Mail when it is part owned by TNT or whoever gets it!!

[Big Daz]

Who says its illegal under state aid rules? I doubt whether the EU are gunna block this - all past attempts from private carriers have been rejected!

What gets on my tits is the Minsiter hasn't even got the guts to mention the "P" word. This is part-privatisation, but they are scared of the banckbench implications. As soon as a minority stake is sold it will no longer be in the public sector, im sorry. Look at National Air Traffic Services (NATS).

The phrase being banded about now is "Majority Public Ownership"

The current package of 1.2 billion loan is still under investigation

[DGP1]

Who says its illegal under state aid rules? I doubt whether the EU are gunna block this - all past attempts from private carriers have been rejected!

What gets on my tits is the Minsiter hasn't even got the guts to mention the "P" word. This is part-privatisation, but they are scared of the banckbench implications. As soon as a minority stake is sold it will no longer be in the public sector, im sorry. Look at National Air Traffic Services (NATS).

The phrase being banded about now is "Majority Public Ownership"

The current package of 1.2 billion loan is still under investigation

Do you think that whenever TNT get their grubby hands on us they'll get the investigation called off (they're responsible for the investigation anyway).

[Big Daz]

Yes!!!!

Its all rather suspect them being very keen to buy in!!!

[fmrPOSTIE]

half the friggin money has been spent anyway, bit late now. Can you really see a situation whereby the EU says RM has to pay back the £600m.

I dont think so.

The EU should keep their noses out of it but hey, we've been conned into this now. I just hope at some point it can be unravelled.

[BELIAL]

You've got to laugh a bit.
What do banks do?
Take deposits and make loans against a sensible reserve of these. Fair enough, I hold this much, so much might be required liquidity ,I make profit on the Cumberland gap and difference between savings and loan rates. How in in the name of sweet Jesus do you contrive to misplace £10 billion?

Do you have any formal qualifications in BANKING?
Mr Head of World strategic bank, A: B : C : D:
NO
NO
NO
NO

[heapsy]

is anyone denying that Royal Mail have many problems as mentioned in this article ? what i dont understand is why cant the Government help RM out and secure its future [like it has tried to do with the banks ] . why cannot RM sort these problems out as a public company , why do we need to be part- privatised. has the private sector got such a fantastic record ?

The simple and shortened answer to your question is that someone, somewhere wants to make a mint out of the situation. Corruption right at the heart of the UK government.