SPEECH TO ROYAL MAIL BRIEFING ON COMPETITION
FRIENDS HOUSE
Since I addressed you at the National Briefing on 22 March in Manchester, there have been a number of developments which need to be reviewed.
Firstly, and most importantly, we have reached a dispute on issues of pay, pensions and the implementation of the Business Plan.
I am not going to dwell on this as you will be briefed separately.
All I will stress is that the necessity of achieving a ‘yes’ vote overrides everything.
A failure in the ballot will be a blow against our campaign on competition every bit as much as our campaign on wages.
In this sense, there is again a clear link between our industrial and political strategies.
All of our reps at national and local levels have a big responsibility over the coming weeks.
If we are successful in the ballot, having a dispute does not undermine our political work.
Here again, the connection between industrial and political issues operate. If our members are up for a fight then the politicians will be more interested in our political initiatives.
Having made that point, strongly I hope, I’ll leave that discussion for later.
Since the Manchester Briefing we have met with Alistair Darling.
The meeting took place on 1 May and both Dave and I regarded this as a positive event.
We spent some time untangling the threads of Government involvement in the dispute and the Government attitude to Royal Mail proposals.
We asked for a copy of the Commercial Agreement between Royal Mail and Government. We had sent a written request on this.
Darling turned down our request on the basis of confidentiality. In a letter from Darling received this week the Secretary of State wrote:
‘The Government is the shareholder in Royal Mail and acts in the same way as a commercial investor would in a private sector company. This is particularly important in relation to the European Commission State Aid Rules. A private sector investor (or lending bank) that has entered into commercial arrangements with the company would not be expected to copy such arrangements third parties, which could be damaging to Royal Mail. As is normal commercial practice, there are confidentiality clauses included in these agreements which are binding on all parties and it is not possible for the Government to let you have a copy as we are subject to the confidentiality clauses in the various documents’.
Now we are preparing to make a request under the Freedom of Information Act Legislation to obtain a copy.
We may well be unsuccessful – but we are going to exhaust the legal possibilities here.
Darling did make clear at the meeting and in his letter that the issue of wages and the issue of ‘transformation of the company’ is essentially an issue for negotiation between Royal Mail and the CWU.
The Government hopes to avoid a dispute, but will not intervene in the current negotiations.
Management suggestions that Government agrees and supports the detail of management proposals are then disingenuous.
Providing there is a commercial return on the investment, the Government is leaving the route to that return entirely up to the CWU and Royal Mail management.
Equally, the Government does not have a fixed view on the future of the pensions scheme. Providing the liability is dealt with, the Government is entirely happy to see Royal Mail and the Union to come to an agreement.
And on the phantom shares – or ‘colleague share’ scheme as it is now called – the only interest of Government is that payments above the agreed cap of five thousand three hundred pounds would breech public spending limits.
In other words the Government has agreed the size of potential profit share benefits. But the Government has not agreed the details of how such a scheme would work.
So, Government has an interest in the results of these negotiations – but is going to avoid intervening in the Union/management relations.
This is very important. This allows us to concentrate on pressing the Government for the Review of Competition. Whilst we concentrate with management on resolving all the issues affecting our members wages, pensions and conditions of work.
On the issue of competition, Darling made it clear that we are pushing against an open door.
He acknowledged the commitment in the Manifesto. He literally said ‘how do you want to do this’.
So, our campaign needs to be very practical in policy proposals and intentions.
Of course, the Government are open to suggestions on this because the situation is serious.
We said all along that Postcomm’s framework has introduced a form of competition which is artificial and parasitic upon Royal Mail.
Evidence is clear on this. Personally – competition has only taken root on access.
In 2005, Royal Mail delivered 99.7% of letters in the previously reserved area.
In 2006, Royal Mail delivered 99.8% of letters in the previously reserved area.
This means that the threat of alternative delivery to Royal Mail is failing.
Royal Mail management have been raising the threat of so called ‘by pass’ in an attempt to create panic and disarray amongst Union members.
Secondly – access competition has taken off in the manner not envisaged by Postcomm.
In 3 years, Royal Mail has lost 40% of the access product.
According to Postcomm’s estimate, at the time of market opening, such a result should not have been achieved before 2010.
At the current rate, competitors will obtain between 70 – 80% of access by 2010.
No one – certainly not Postcomm – knows the impact of this upon Royal Mail funding.
But we can guess that Royal Mail would register substantial losses at this rate. The choice would then be either Government subsidy to Royal Mail or huge increases in the price of the USO stamps.
Now since the Manchester Briefing, Postcomm has launched a review of access products.
The CWU has taken part in the Postcomm workshop – and we have had a major impact.
Postcomm has indicated to the CWU that they are prepared to allow Royal Mail to make an adjustment to access price in Royal Mail’s favour.
We will not know the size of this until the summer. But Postcomm are very concerned.
Postcomm know that the CWU is launching this campaign for the review.
They will have to be worried that their own mistakes are going to be subject to public scrutiny in one form or another.
So we have to concentrate on getting the review called.
To this end we are placing the EDM today. The text of which is being circulated to you.
To nights briefing of Labour MPs is the first step in ensuring that we get the review convened.
This is a session where our aim is to persuade MPs of the strength of our campaign – rather than browbeat them for their failure.
Given the changes if Government, it is important that we build up momentum. No matter what the changes in personnel are, we need the Government review.
So you must ensure that your Branch contacts all your local MPs to sign up to the EDM.
We have set up a coordinating committee for the campaign – involving HQ staff and a number of lay activists from the Branches.
We will be providing a variety of briefing material – starting with a leaflet for distribution after to nights meeting, and the research brief which you will receive today.
I am confident that with your support, we will get Government to launch the review we need.
Thanks for listening.
WH/SB/JM
15/05/07
Posted by Billy Hayes | @ Tue, 15 May 2007 14:33:56 +0100