PM pushes ahead on postal sell-off plans

[TrueBlueTerrier]

http://www.ft.com/cms/s/0/1cc81990-fc7c ... ck_check=1" onclick="window.open(this.href);return false;

By Jean Eaglesham, Chief Political Correspondent

Published: February 16 2009 23:01 | Last updated: February 16 2009 23:01

Gordon Brown will press ahead with contentious legislation to part-privatise Royal Mail “within weeks”, despite facing potentially the biggest backbench rebellion of his premiership, according to government insiders.

The prime minister is determined to face down a revolt by Labour MPs and the main postal union, which is threatening to withdraw about £1m a year in support to the hard-up party.

More than 120 Labour MPs have signed a parliamentary motion opposing plans, announced in December, to sell about a third of the state-owned postal operator to an overseas rival, such as TNT, the Dutch company.

Ministers will offer limited concessions to the rebels, including a provision in the bill requiring Royal Mail to remain majority public owned.

Lord Mandelson, the business secretary, is also prepared to review statutory controls on pricing, blamed by many Labour MPs for favouring Royal Mail’s rivals over the British operator.

But the government is adamant that such regulatory changes are not a substitute for part-privatisation.

“We understand this is a difficult discussion for the Labour party to have, and our door is open to talk to MPs about any concerns they have,” Pat McFadden, postal affairs minister, told the FT on Monday.

“But the company is facing big problems on the pension deficit, on the decline in mail volumes, and on the lack of modernisation relative to other postal companies, and that’s why we have to act.”

The determination to push ahead with the sell-off seems to be driven by wider political concerns, as well as the belief that a foreign company’s expertise and capital injection are integral to turning round Royal Mail.

Lord Mandelson is still discussing with the Treasury the extent to which the state will support Royal Mail’s pension liabilities. The government wants taxpayers to take on a significant element of the pension deficit as part of the proposed reforms.

The multi-billion pound liability will leave postal workers enjoying generous final salary benefits, while private-sector workers are increasingly facing curbs. Ministers believe that voters cannot be expected to swallow this without reassurance that the company will be modernised to avoid future losses.

The pensions problem is one factor behind the decision not to delay the legislation. Royal Mail’s pension trustees will recommend this year whether additional measures are needed to deal with the deficit, which is expected to have risen significantly above the £5.9bn estimate of last March.

Lack of progress on the government plans could lead to the trustees demanding higher contributions from the company or more taxpayer funding.

[Yahoorsur]

'The multi-billion pound liability will leave postal workers enjoying generous final salary benefits, while private-sector workers are increasingly facing curbs'.


Oh so my pension is ok then ,I must have imagined that I no longer have a final salary scheme and that I have to work till im 65,and that i have to work till Im 67 to get my state pension scheme

[Broxi51]

Its maybe been asked before in which case I apologise but how can TNT take a percentage of RM and then carry on competing against them. It surely must be a conflict of interest. If they are on the board of RM then they will be privvy to the plans that RM have and their business plans and therefore TNT can underbid on anything RM goes for. It will also open doors for them to help develop their own plans to deliver end to end in the lucrative areas but leave RM to deliver to rural areas under their USO obligations. Prices are going to go sky high as RM will have to continue to increase prices to keep themselves afloat to deliver the USO. A few years down the line another group of MP's in power (NOT Labour for many many years) will point to the fact that RM can no longer make a profit and are having to be subsidised by major price increases year after year and then full privatisation will follow. It is absolutely farcical that Broon & Mandy are trying to get away with this. Step down now before there is no GB left Broon

[norbert]

'The multi-billion pound liability will leave postal workers enjoying generous final salary benefits, while private-sector workers are increasingly facing curbs'.


Oh so my pension is ok then ,I must have imagined that I no longer have a final salary scheme and that I have to work till im 65,and that i have to work till Im 67 to get my state pension scheme

It's how those Tory Papers like to stir it up with Joe Public against the featherbedded public sector i.e . " We're paying taxes to subsidize your pension " - " We've been shafted , so you lot will have to take it as well '' bitterness and two wrongs making a right .

It all detracts attention , divide and conquer .

[norbert]

Its maybe been asked before in which case I apologise but how can TNT take a percentage of RM and then carry on competing against them. It surely must be a conflict of interest. If they are on the board of RM then they will be privvy to the plans that RM have and their business plans and therefore TNT can underbid on anything RM goes for. It will also open doors for them to help develop their own plans to deliver end to end in the lucrative areas but leave RM to deliver to rural areas under their USO obligations. Prices are going to go sky high as RM will have to continue to increase prices to keep themselves afloat to deliver the USO. A few years down the line another group of MP's in power (NOT Labour for many many years) will point to the fact that RM can no longer make a profit and are having to be subsidised by major price increases year after year and then full privatisation will follow. It is absolutely farcical that Broon & Mandy are trying to get away with this. Step down now before there is no GB left Broon

Relationship between RM & TNT is a bit too cosy , trials being carried out in Holland for RM which would cause IA over here , something does stink ?

[theflyingpostman]

Its maybe been asked before in which case I apologise but how can TNT take a percentage of RM and then carry on competing against them. It surely must be a conflict of interest. If they are on the board of RM then they will be privvy to the plans that RM have and their business plans and therefore TNT can underbid on anything RM goes for. It will also open doors for them to help develop their own plans to deliver end to end in the lucrative areas but leave RM to deliver to rural areas under their USO obligations. Prices are going to go sky high as RM will have to continue to increase prices to keep themselves afloat to deliver the USO. A few years down the line another group of MP's in power (NOT Labour for many many years) will point to the fact that RM can no longer make a profit and are having to be subsidised by major price increases year after year and then full privatisation will follow. It is absolutely farcical that Broon & Mandy are trying to get away with this. Step down now before there is no GB left Broon

Quite right. The whole postal liberalization argument was about promoting competition and choice.

Here we have a competitor to Royal Mail expressing an interest in acquiring a stake in a competitor.

Why aren't any of the other players in the market kicking up a stink about this.

Another point to mention is why do TNT want to take a stake in Royal Mail when they are trying to deploy their own postmen onto the streets of G.B.

[janitor]

TNT deploying their own postman is just a backup incase :mfo doesn't get his own way, if he does they will probably drop these delivery people along with a lot of there current parcel delivery people, Rm van drivers will be doing the current parcel deliveries, RM walkers will be doing letters, leaving TNT to only handle the jobs artics are needed for, and to watch the money roll in, and maybe throwing RM a few scraps now and again.

[NWpostie]

Poorly thought out, poorly planned, it will end in tears, like all previous State Sell offs, prices went up, services got worse, Brown is not Prime Minster material, he should go.



* You have sat too long for any good you have been doing lately... Depart, I say; and let us have done with you. In the name of God, go!

Oliver Cromwell's Address to the Rump Parliament (20 April 1653)

[Radio]

TNT deploying their own postman is just a backup incase :mfo doesn't get his own way, if he does they will probably drop these delivery people along with a lot of there current parcel delivery people, Rm van drivers will be doing the current parcel deliveries, RM walkers will be doing letters, leaving TNT to only handle the jobs artics are needed for, and to watch the money roll in, and maybe throwing RM a few scraps now and again.

Read it on hellmail that TNT have already laid off 300 staff in their UK operation. Their profits are a fraction of what they earned in this quarter last year. On the other hand RM's profits are on the rise. I still wonder why TNT??? Are they the ones who gave most generous 'donations' to :mfo

[ar26]

So if the so called sale goes through are we just expected to accept it or are we walking out ?

[TrueBlueTerrier]

So if the so called sale goes through are we just expected to accept it or are we walking out ?

If it does go through we will have to accept it I suppose. But the idea is to make it as uncomfortable as possible for the PM and PLP before they actually do the dirty deed. Yes, IMHO we will have to disafilliate and we will have to go on strike or carry out some form of IA.

No sure that once the deed is done that there would be much support inside RM for an indefinite strike, which would be needed, but I do know that any support we would have from the public would disappear quite quickly.

[ar26]

at least if we take industrial action official or unofficial, when in the years to come the public start complaining over late afternoon deliveries and the amount of junk we'll be delivering we can always say remember we went on strike well this was the reason for it. As mentioned in prev posts I can't understand how this doesn't go against the competition laws. How can an open market designed to allow more postal operators be working when the 2 biggest merge. Plus legally can TNT continue to offer cheaper products to thier customers if they are part of RM. Surely if they continue to offer cheap downstream access to TNT for letters then the other postal operators will kick up absolute hell. If we can't compete with TNT due to the prices set by the regulator then surely TNT will no longer be able to undercut either ?

[TrueBlueTerrier]

Actually its a good question for a poll that ar26. I think I'll put one in.

[Puppetmaster]

Please ,please ,can somone explain falling mail volumes,apart from THE ODD TUESDAY ,our mail volume in our office just keeps going up,this is without the packets.

IN our office we belive falling mail volumes to be a lie.The Hooper report refers to Stamped mail,wich without question is very little,but what about every thing else?

[dvbuk55]

TNT profits were a third down - and they are the ones who are going to save us?

We, as a family, buy quite a lot of things on line, several times a month and so we have experienced a succession of couriers for a number of years.

Now here's the thing, TNT was supposed to deliver something but lo and behold it was brought by HDNL, DHL was supposed to deliver something and - you've guessed it up pops HDNL, again DHL are supposed to be the courier and bingo - some blond bimbo arrives at around 5pm with a child in the back of a cabriolet car with our parcel which she could barely lift out of the boot. A parcel which contained coffee sachets was delivered today by HDNL and left at the side of the house in a black bin bag, the cost was less than £50 and we live in relatively affluent area and so it is not likely to be stolen but if that is their usual method of delivery in any area................... . The thing is you don't have a choice of courier - I once fell out with a supplier who suggested the courier was MY agent - I pointed out that as they employed them to deliver at my expense they were my agent.

Everything we have had delivered by RM has arrived when it was due and a signature obtained when necessary.