The privatisation of Royal Mail is unlikely to take place until at least 2013, due to thechallenging market conditions and because a number of reforms and approvals need to be completed
first, CEO Moya Greene indicated yesterday.Greene was optimistic that working with a new regulator, Ofcom – which took over fromPostcomm as Royal Mail’s regularot earlier this year – would help secure a lighter-touch regulatoryapproach, but it was also essential for the European Commission to approve the UK government’sstate-aid application to relieve Royal Mail of its historic pension liability and write off a largepart of its debt.
Although the UK government has now passed legislation to privatise Royal Mail, Greene saidthis was unlikely before 2013 because of the need to make progress on all fronts.
“The necessary measures we implemented earlier in the year – increasing our prices and tightcost control – are a key part of our strategy to return Royal Mail to sustained financialviability,” she said. “They are beginning to deliver results. But we have a great deal to do.
“We are halfway through our financial year and are operating within a difficult andchallenging business environment. The economic downturn is proving to be prolonged and, like manyother predominantly UK and European-based companies, our trading conditions are challenging.”
She said it was crucial to press ahead with Royal Mail’s modernisation programme, which sheacknowledged was “very tough” for employees because almost every aspect of their job was beingchanged.
Greene said the pace of job losses would not necessarily increase, although a lot depended onhow fast the company’s letters business declined. Royal Mail estimates the number of letters postedwill continue to fall at about 5 per cent a year, although some of that is offset by risingdeliveries of parcels and packages generated by e-commerce.
After Royal Mail yesterday reported improved half-year results, including operating profit upby £45 million and improvements in most parts of the business, the Communication Workers Union(CWU) said the results showed that reform was possible without privatisation.
Dave Ward, CWU deputy general secretary, said: “The progress so far proves this can besuccessfully achieved under public ownership and clearly shows the importance of keeping the groupof businesses – letters, Post Office, Parcelforce and GLS – integrated. Breaking this business upwould be a disaster for UK postal services.”
He said the benefits of the recent improvements should be shared with Royal Mail workers, andcalled for greater job security, including no compulsory redundancies.
“Better performance and improved profits is welcome news for Royal Mail and its staff – butthe industry still faces major challenges to secure its future. We want this success to be sharedwith postal workers in the form of higher pay and a commitment to job security, with an extensionto Royal Mail’s commitment to completing modernisation with no compulsory redundancies.
“The modernisation programme has brought major change, including voluntary job losses, newmachinery and equipment and changes to workplaces. It’s been difficult for both postal workers andcustomers and rewarding staff is the right thing to do. The current talks we’re in with the companyare crucial to maintaining the successful modernisation of Royal Mail and in those we’re seekingcommitments on pay and job security.”
Ward said Royal Mail workers understand the changes taking place, in terms of competition andchange in the industry, and claimed “the crucial thing is to reward and motivate postal workers”.He added: “Any redundancies must be voluntary, not forced, and the postal service must beprotected. Without that, it doesn’t matter what you do.”
