Row deepens over plan to insulate private investors

[TrueBlueTerrier]

http://scotlandonsunday.scotsman.com/bu ... 4443243.jp

Royal Mail row deepens over 'horrific' plan to insulate private investors

Published Date: 31 August 2008
By Nathalie Thomas
THE row over the private sector's involvement in Royal Mail will step up a gear this week when Postcomm presses the Government to reassure investors they won't be responsible for the service's £3.4bn pensions black hole.
But postal unions have already lambasted the proposal as allowing the private sector to cherry-pick the profitable parts of the service while leaving postal workers uncertain about their retirements.

Nigel Stapleton, chairman of the postal regulat
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or, will argue that the Government should encourage private investment in the service by reassuring potential buyers they would not assume liability for its gaping pensions deficit. According to the last estimate, Royal Mail's pensions deficit stands at £3.4bn, but that figure is expected to be revised substantially upwards when the latest valuation is revealed next month. Some estimates suggest it may have more than doubled to £7bn.

Analysts say the pensions problem would make it extremely difficult for the Royal Mail to attract the private investment both Postcomm and its own management say it needs to modernise.

In an interview with Scotland on Sunday ahead of a visit to the Scottish Parliament this week, Stapleton said the pensions black hole was amassed during the 1980s and 1990s, and has nothing to do with its current operations. He said it is standard practice in the private sector when firms buy a stake in another firm that they do not automatically assume liability for historical problems.

The Royal Mail should not be an exception, he argued.

"Usually the new owner does not take on those liabilities," he said. "If the Government was to make the decision to offer a stake in the Royal Mail, then something would have to be done to make sure the owner does not take on those (pensions] liabilities."

Stapleton is seeking to widen support for the part privatisation of the Royal Mail after Postcomm recommended in May that it should be allowed to raise external capital – a model that has been tried and tested in several other European countries. In the same month, Royal Mail made its own plea to issue shares.

But unions last night dismissed Stapleton's proposal as a "horrific" example of allowing the private sector to invest in the profitable parts of the business, while leaving the state to struggle with its debts.

A spokeswoman for the Communication Workers Union said: "Pensions are a crucial part of workers' benefits. All companies, including Royal Mail, have an obligation to their workforce to uphold their agreed terms and conditions, especially pensions. We expect employers in the mail industry to provide decent pay and working conditions for postal workers and not use competition as an excuse to undercut their terms or reduce pension provision."

She claimed the reason that Royal Mail is labouring under such severe problems – it posted a loss of £279m in May – is due to Postcomm's decision to open the market up to competition ahead of the rest of Europe, and for setting "incredibly low" tariffs for the "final mile", the stage where post is delivered.

Private companies, such as TNT Post and Business Post, have set up profitable businesses collecting bulk mail from businesses, but use the Royal Mail for the final stage of delivery. Postcomm decides the tariffs for this final stage, and the CWU argues that the prices set are putting Royal Mail's competitors at an advantage.

But Stapleton will this week seek to persuade Scottish ministers and businesses that the liberalisation of the market is not the root cause of the postal service and Post Office network's demise.

He argued that the single biggest reason for the fall in mail volumes has been the digital revolution, as people switch to sending e-mails rather than letters.

"That is removing value from the Royal Mail to a greater extent than Royal Mail is losing value to new mail competitors," he said.

The Government is preparing to publish the results of the Hooper review into the future of Royal Mail in October.

[TrueBlueTerrier]

Don't forget the new rules when replying to this thread

[norbert]

It's a spin battle & an attempt to deflect blame away from Postcon - the Union's view is that Postcon has deliberately distorted the market -

I'd have thought that Royal Mail is technically bankrupt with it's pension deficit - however New Labour have privatized a once Government Dept which also had a pension deficit -

According to other sites , we're all just blaming :lfo & :cfo and solely concerned about our wage packets and posting foot-stomping "negative " venom about RM and not seeing the big picture .

[POSTMAN]

Don't forget the new rules when replying to this thread

Damn,permission to cancel the rules for a bit.

[TrueBlueTerrier]

Don't forget the new rules when replying to this thread

Damn,permission to cancel the rules for a bit.

[k979aaa]

The chairman of the postal regulator does not know what he is talking about bet he's never done a day's work in his life!. THIS MAN COULD NOT EVEN REGULATE HIS BOWELS HE TALKS OUT OF THEM INSTEAD!. POSTCOM = ( POSTERIOR )

[pinstripe]

Don't forget the new rules when replying to this thread

Erm, erm,erm,......No sweary words, but why don't they just cancel the whole pension scheme. Yeah people have paid into it for years, but come on, you know our betters want another BMW, so why don't we agree to live our old age in abject poverty so rich, fat cat businessmen can get even richer? (Do we not have a smiley for suicide)

[POSTMAN]

He argued that the single biggest reason for the fall in mail volumes has been the digital revolution, as people switch to sending e-mails rather than letters.

"That is removing value from the Royal Mail to a greater extent than Royal Mail is losing value to new mail competitors," he said.

How the f**k does that make sense!!
The drop in volume(lets not kick off on that one) is far less damaging than the leeches like TNT nicking our work surely ffs.

[BELIAL]

Spin, word play, scene setting,say it over and over again it becomes the benchmark.Agenda setting ,safe issues ,both are recognised tools of social manipulation,blunt ,but on average extremely effective. Consider the old favourite of Chinese water torture,the constant dripping wears away the stone
Stapleton is hand picked, no fool ,and knows exactly what end he is working towards. Now that may not be the publicly stated end ,but who will that surprise?

[norbert]

Don't forget the new rules when replying to this thread

Erm, erm,erm,......No sweary words, but why don't they just cancel the whole pension scheme. Yeah people have paid into it for years, but come on, you know our betters want another BMW, so why don't we agree to live our old age in abject poverty so rich, fat cat businessmen can get even richer? (Do we not have a smiley for suicide)

now , now - we all come from good peasant stock and know our place - the workhouse isn't that bad or you could be featured in the Sun working for Asda / Walmart as Uncle Rupert encourages that sort of thing - better than frittering your money away in the Labour Club - seriously even the Tories knew that trickle down stuff was nonsense .

You have to translate :lfo speak - " The legacy from the past " :

[stevie247]

Is it just me or does this quote from mr stapleton seem a bit He argued that the single biggest reason for the fall in mail volumes has been the digital revolution, as people switch to sending e-mails rather than letters.

"That is removing value from the Royal Mail to a greater extent than Royal Mail is losing value to new mail competitors," Does he really believe this that downstream access(sorting and delivering your competitors mail at a loss) has had a lesser effect on RM profits than e-mail. This guy has clearly got his own agenda because blatant lies like this if believed by politicians will be the death of RM.

[norbert]

Is it just me or does this quote from mr stapleton seem a bit He argued that the single biggest reason for the fall in mail volumes has been the digital revolution, as people switch to sending e-mails rather than letters.

"That is removing value from the Royal Mail to a greater extent than Royal Mail is losing value to new mail competitors," Does he really believe this that downstream access(sorting and delivering your competitors mail at a loss) has had a lesser effect on RM profits than e-mail. This guy has clearly got his own agenda because blatant lies like this if believed by politicians will be the death of RM.

I've always been convinced that these people are Tory Free-marketeers and I'm inclined to trust them as much as :lfo & :cfo & their many clones within RM , Belai has got them sussed out .

Will Hutton ( A Liberal Keysnian Economist ) did a hatchet job on these ideologues and the "interesting " thing is the firms they join after leaving Postcon . The CWU said they made mistakes with the Postal Services Act and you have to look at the dodgy agendas of Blue Labour's Patronizing Pat , Byers and successors like sinister Hutton .

[pinstripe]

now , now - we all come from good peasant stock and know our place - the workhouse isn't that bad or you could be featured in the Sun working for Asda / Walmart as Uncle Rupert encourages that sort of thing - better than frittering your money away in the Labour Club - seriously even the Tories knew that trickle down stuff was nonsense .

You have to translate :lfo speak - " The legacy from the past " :

Even better, we could be pictured, smiling like an idiot, in the Courier. But only if we bend over....

[plodsie]

Oh I hate saying it, and I'll probably get flamed for it. But the future of RM is looking safer in the hands of the Tories than it ever will with Liebour. Sure we may well be privatised but I doubt they'd have ever let things get this bad...

SORRY!

[norbert]

Oh I hate saying it, and I'll probably get flamed for it. But the future of RM is looking safer in the hands of the Tories than it ever will with Liebour. Sure we may well be privatized but I doubt they'd have ever let things get this bad...

SORRY!

Ironically there's a lot of doctors etc say similar things - you should have seen this message board concerning a New Labour Minister - it made us lot sound like something out of a Enid Blyton Film !

Their view was well - let's go back to 1997 - at least it's better than vacuous Blue Labour Ministers , interfering , setting targets etc and witless Civil Servants in Whitehall compounding the mess that had been made before .

Remember Patronizing Pat Hewitt getting slow handclapped at the RCN Conference , there was plenty of women that wanted to warmly shake her by the throat .