Tag: UK

MPs call UK Royal Mail’s employee share plans incoherent

Posted by | Dec 20, 2005 | |

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.”

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MPs condemn ‘untimely’ opening up of UK postal market

Posted by | Dec 20, 2005 | |

The postal regulator Postcomm’s decision to open the postal market to full competition from the beginning of next month is today criticised as “untimely” by a committee of MPs. In a report published today on Royal Mail after liberalisation of the market, the trade and industry committee warns that Royal Mail “has been asked to prepare for competition at a time of great commercial uncertainty”. MPs say that at a time when Postcomm is reviewing the price that Royal Mail can charge for its regulated services, the company is facing “huge challenges in addressing its pensions deficit and investment needs”. The committee says opening the market to competition did not pose a threat to Royal Mail’s obligation to deliver across the UK for the same price. But it warns that “the regulator must remain vigilant to ensure that competition in postal services does not come at the cost of universal service”. Any universal service which allowed exemptions such as rural areas was “not worthy of the name”.

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UK govt should extend Royal Mail dividend exemption to help pension fund deficit

Posted by | Dec 20, 2005 | |

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.

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Business postal customers win wrongly withheld GBP40 million in compensation battle

Posted by | Dec 20, 2005 | |

In a landmark Judgment the High Court has found in favour of the postal watchdog, Postwatch, against the economic regulator, Postcomm. This is the first time a Consumer Council has successfully Judicially Reviewed an industry regulator. Millie Banerjee, Chair of Postwatch, commenting on the High Court’s decision said: “We are, of course, delighted the Judgment is in our favour. This is an important outcome ensuring Royal Mail’s customers receive the GBP40 million of withheld compensation they were due for service failures in 2003/04. Customers have been patient but hopefully can now see light at the end of what has been a long legal tunnel. One of our first challenges is to put in place the processes that will ensure Postwatch and Postcomm work jointly to achieve the right outcomes for customers. Royal Mail now needs to deliver what the Court has decided and pay in full the compensation due to customers.”

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Compensation case victory for UK bulk mail customers

Posted by | Dec 19, 2005 | |

Thousands of Royal Mail customers who have received poor service could be in line for new compensation payments following a High Court ruling today. The Consumer Council for Postal Services, known as Postwatch, won a legal challenge against Postcomm, the UK postal regulatory body. The case arose after Postcomm refused last January to order the Royal Mail, which has already paid out some GBP35 million, to pay another GBP35 million to users of bulk mail services which were not up to standard. Postcomm declined to make an enforcement order under the 2000 Postal Services Act for the financial year 2003-4. Postwatch argued that Postcomm was under a statutory duty to enforce. Today, Mr Justice Sullivan, sitting at the High Court in London, ruled in favour of Postwatch but gave Postcomm and Royal Mail time to consider appealing to the Court of Appeal.

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