Tag: UK

The Labour Party risks one of its biggest showdowns with the unions and the loss of an important source of funds if the Government announces plans to give Royal Mail workers shares in the postal group. Royal Mail expects the Government to outline plans for Pounds 2 billion of state investment and an employee share ownership scheme as early as next week, when the group publishes its financial results. Such a move could trigger the cutting of funds to Labour by the Communication Workers Union (CWU), which holds its annual conference the following week. The CWU gives more than Pounds 500,000 a year to Labour through affiliation fees and donates more for election campaigns. The union and Labour backbenchers have voiced their opposition to the employee share scheme, which they view as the first step to privatisation.

Sub-Postmasters in the Isle of Wight are considering running their own mail service, with their own stamps and franking, to try to stave off the closure of their rural post offices. They believe that 35 of the island’s 52 post offices are under threat and claim that their future may depend on declaring independence from the Royal Mail for local collections and deliveries. Rodney Archer, the secretary of the island branch of the National Federation of Sub-Postmasters, said members had voted unanimously to form their own independent business association to investigate a range of proposals to win new custom, including setting up their own collection, sorting and delivery service.

The Royal Mail is set to unveil a surge in profits to pounds 600m later this month, but is in danger of being overtaken by a row over pay after unions turned down its latest offer. The Communication Workers Union has rejected a proposed 2.9 per cent pay increase and is seeking further talks with chief executive Adam Crozier. The CWU’s deputy general secretary, Dave Ward, said wages needed to be brought into line with the national average, which 2.9 per cent would not do. “We know it’s not going to happen overnight, but as a starting point it’s not enough.” But the state-owned group says it will not up “its very good offer”. A Royal Mail spokesman said: “It’s clearly above inflation and it comes against a backdrop of increasing competitive pressure on the business. In that context it’s a very good offer and a final offer. This is what we can afford.”

Political controversy over the future of the Royal Mail continued yesterday as the Liberal Democrats called on the Government to turn down the organisation’s request for Pounds 2 billion of investment. The Treasury is considering the appeal, which is linked to a controversial employee share ownership scheme backed by the Department of Trade and Industry. But Ed Davey, Liberal Democrat trade and industry spokesman, said: “Royal Mail is in financial crisis, but a taxpayer bailout is not the solution.” The Liberal Democrats want Royal Mail to be part-privatised, with the proceeds pumped back into investment in new equipment.