UK Royal Mail to deliver new plan on ownership
Allan Leighton, the chairman of Royal Mail, will present plans for wider ownership of the postal group to the Department of Trade and Industry in the next few weeks.
The proposals, included in a five-year plan for the business, will trigger a heated political fight over the future of Royal Mail but will be presented as moves to give employees more ownership rather than a creeping privatisation.
This week Alan Johnson, the Trade and Industry Secretary, will hear concerns from the Communication Workers Union (CWU), which he once led before he became an MP eight years ago.
Mr Leighton will tell ministers that Royal Mail needs the scale of investment that can be achieved only by bringing in outside capital.
But the CWU will press Mr Johnson on the issue of trust, after Labour’s manifesto said it had no plans to privatise Royal Mail and that it wanted to see the operation succeed in public ownership. The issue is doubly sensitive for Mr Johnson, who is also a former postman, because he personally led union fights against suggestions of privatisation by the Conservatives.
Royal Mail also wants an early start to a government review on the impact of market competition because it believes this will strengthen its case for more cash. It wants investment of at least GBP 2 billion. Last week the CWU wrote to all Labour MPs about the future of Royal Mail and it is understood that most supported full public ownership.
At least one member of Royal Mail’s board, Baroness Prosser, would find it difficult to support any wider ownership plan that appeared to be partial privatisation. Baroness Prosser, who was appointed as a non-executive director last year, is a former deputy general secretary of the Transport and General Workers’ Union.
Royal Mail is also poised to turn up the heat on the postal regulator, Postcomm, over pricing controls. Executives will stress that Royal Mail has a pensions deficit of GBP 2.5 billion and that the price of stamps will need to reflect that.
The organisation is also trying to get the Government to take over its historic pension obligations, meaning that 220,000 pensioners would be paid directly by the Government. Should this happen Royal Mail could write off GBP 1.5 billion of the deficit. However, it is not certain that all the pension fund trustees will support the plan.
