UK postal union welcomes select committee inquiry into Royal Mail finances

The Communication Workers Union has welcomed the Trade and Industry select committee’s decision to look at the finances of Royal Mail.

CWU general secretary David Ward yesterday called on the all-party group to look at Royal Mail after accusing management of exaggerating the extent of the company’s problems.

Committee chairman Martin O’Neill told AFX News he would be summoning all parties to a hearing in early October when parliament returns after the political party conferences.

“Obviously we would welcome that and our view would be the sooner the better,” said Ward, whose members are locked in a dispute with Royal Mail over pay.

The CWU has balloted its 160,000 members to endorse strike action and the result is due on Sept 17.

“Once we know there is going to be open book accounting that is going to put pressure on the employers to settle,” Ward said.

O’Neill said the committee had already decided to look at the mail services regulator Postcomm and liberalisation of the market.

This would allow the MPs to investigate the “financial viability” of Royal Mail, he said.

“We will be looking at the books and listening to the management and the union,” he said.

If the workers vote to strike it will be the first time they have walked off the job in seven years.

Ward said he was willing to sit down and talk with management over the pay claim, while O’Neill said he believed the two sides were closer to reaching a deal than their remarks suggested.

Ward said his members believed Royal Mail, which owns the Post Office, is exaggerating the severity company’s financial position.

“The Post Office’s financial position is not as bad as they are making out,” he told a news conference at the Trades Union Congress annual conference.

Ward challenged the Royal Mail claims that 16,000 staff had left the business when the company’s accounts for the two years to March 31 showed only 2,000 redundancies.

He also said last year’s loss of 611 mln stg contained a 473 mln stg provision for redundancy payments and the core mail business made a 66 mln stg profit which is forecast to rise to 100 mln stg this year.

Royal Mail chairman Allan Leighton has said a strike would cost the publicly owned Royal Mail up to 20 mln stg a day and would jeopardise the entire business, “putting everyone’s future at risk”.

Royal Mail says its existing pay offer is worth 14.5 pct extra over 18 months, while the CWU counters that the bulk of this is tied up in productivity improvements including the axing of the second daily delivery which could cost 8,500 jobs.

Ministers have been in Brighton attempting to exert pressure on the CWU leadership to resume talks.

Leighton, who has rejected the CWU’s demand for an immediate 8 pct pay rise, has said that if the ballot backs industrial action there will inevitably be a strike, because the Royal Mail cannot afford more than the 340 mln stg cost of its final offer.

He is carrying out a three-year plan costing 3 bln stg, including 1 bln stg of government loans, to restore the state corporation to profitability.