Tag: Royal Mail

Royal Mail’s plans to give its employees shares hit a political problem yesterday when an all-party group of MPs said that they lacked coherence and that there were less controversial ways of motivating staff. The Trade and Industry Select Committee said that the explanations for the plan, a cornerstone of chairman Allan Leighton’s aspirations for Royal Mail, “are far from complete and no coherent process for how these shares would be transferred or traded has been given. If Royal Mail’s management still wish to pursue commercial ways of motivating their employees, we believe there are less controversial ways to do this, such as the current profit-sharing scheme.”

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.