Ref GS 11.0
Date: 25/03/09
(All Branches)
TO: THE BRANCH SECRETARY
Dear Colleague
Keep The Post Public
Branches will know that the Hooper Report contained the following paragraph
It was assumed that this was intended to be a postal operator that had the legal requirement to deliver the universal service obligation (USO) as required under the European Directive. Since that time, Lord Mandelson has intimated that he would consider selling shares (privatising the Royal Mail) to a private company as long as they had “managerial expertise”, that includes private equity companies being be considered in any bids to buy Royal Mail regardless of that company’s Head Office location (or their experience of the postal sector). For example, CVC who have a 50% minus one share holding in the Belgium Post Office, have their Head Office in Luxembourg.“To provide commercial confidence, capital and corporate experience, we recommend that there should be a strategic partnership between Royal Mail and one or more private sector partners with demonstrable experience in transforming a major business, ideally a network business, in circumstances comparable to those now faced by Royal Mail. The precise nature of such a partnership and its detailed terms should be a matter for the Government to negotiate. At its core, however, will be Royal Mail’s obligations under the universal service, as required under EU and UK law”.
At a meeting held on 2ND February, the General Secretary questioned Stephen Ludgrove of the Shareholder Executive – the Government body responsible for Government shares – on the legal process for the privatisation of Royal Mail. He stated that seeking out interested parties to buy Royal Mail was not covered by the General Agreement on Tariffs and Trade (GATTS. GATT regulates trade between countries around the world and is designed to promote free trade. Stephen Ludgrove who has asked the Swiss Bank, UBS, to deal with the sale of Royal Mail, stated that there was a body of law on this matter and that he would provide the General Secretary with the relevant law. This has not happened to date.
On 2nd February the General Secretary spoke to Stephen Ludgrove directly, he inferred that he had cleared with Pat McFadden. Despite the promise to email the details that day, this did not take place. A letter was sent to him reminding him of his two promises (copy attached).
It should be noted that the closing date for amendments to privatise Royal Mail (for the House of Lords) was Friday March 20th.
Notwithstanding that the Bill is going beyond what most people expected, the General Secretary wrote to the Chief Executives of all those postal operators which are Universal Service Providers (USPs) in the European Union Member States or are part of the European Free Trade area ( Ireland, Norway, Switzerland).
Together with this, John Baldwin, Head of International Affairs, wrote to our sister unions seeking information with respect to the sale of Royal Mail. The information received to date from our sister unions is attached. As can be gleaned from the attached schedule, it appears that the choice for the Government is narrowing down to TNT and the private equity group C.V.C.
TNT Profits
For the year ending 31 December 2008, profits after tax for the TNT Group were
€560 million (pre-tax profit was £802 million). Total revenues were £11,152 million.
For the fourth quarter of 2008, profit from continuing operations was €61 million. Revenue was €2,933 million
CVC Capital Partners Limited (UK subsidiary of CVC Capital Partners, based in Luxembourg) Profits:
For the year ending 31 March 2008, profit after tax was £1,313,000 (pre-tax profit £1,925,000). Turnover was £25,732,000
However, CVC Capital Partners has holdings in 52 companies worldwide employing approximately 447,000 people in numerous countries. Together these companies have combined annual sales of 88.0 billion euros.
TNT has refused to introduce the postal sector minimum wage in Germany. It also had its union de-recognised because it did not prove to the German Federal Court that the union was independent of the TNT Board.
Branches should utilise all of this information in our campaign to Keep the Post Public.
Any enquiries on these international matters should be addressed to John Baldwin, Head of International Affairs jbaldwin@cwu.org
Yours sincerely
Billy Hayes Dave Ward
General Secretary Deputy General Secretary (P)