Tag: Royal Mail

The government should extend Royal Mail’s exemption from dividend payments to help ease its pension deficit and allow it to invest in its network, a committee of MPs said. In a report, the all-party Trade and Industry committee accepted that postage prices would have to rise to help bridge the 4 bln stg deficit in the fund. Earlier this month Royal Mail was given the go-ahead by industry regulator Postcomm to raise the price of a first-class stamp to 36p to help fund the shortfall. This will provide an extra 320 mln stg a year and help to pay off the difference over anything from eight to 17 years, depending on equity market performance. However, the committee warned that the government should take its share of the blame for taking 2.3 bln stg in dividends from the business between 1984 and 1999, depriving it of investment capital.

Helen Weir, Group Finance Director of Lloyds TSB, is to be appointed a non-executive member of Royal Mail’s board, it was announced today. The move was warmly welcomed by Royal Mail’s Chairman, Allan Leighton, who said: “I am delighted Helen is joining us. Her breadth of senior financial and operational experience will strengthen Royal Mail’s board and be an asset to the company as it tackles the challenges of competing in a market opening to full competition on January 1.”

Royal Mail’s hopes of persuading ministers to back its plans for employee share ownership will suffer a setback next week when a committee of MPs declares it is unconvinced by the scheme. The Commons trade and industry committee, which publishes on Tuesday the findings of a long inquiry into postal market liberalisation, is expected to be dismissive of the chairman Allan Leighton’s proposal. The state-owned postal operator, which faces full market liberalisation from January 1, wants to offer employees tradeable shares in the business, but has encountered fierce opposition to the plan from trade unionists and Labour MPs.