Labour MPs' RM rebellion-threatens Saturday deliveries

[TrueBlueTerrier]

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Saturday post deliveries could be lost if Labour MPs block Government plans to part-privatise the Royal Mail, ministers have warned.


By James Kirkup, Political Correspondent
Last Updated: 11:05PM GMT 20 Feb 2009

Government insiders have concluded that Royal Mail's business is now so precarious that without a major overhaul it will be unable to continue with its universal daily delivery service.

Ministers are warning that Royal Mail risks following the example of the US postal service, which has recently sought permission from the US Congress to drop its Saturday service amid huge financial losses.

Lord Mandelson, the Business Secretary, will shortly introduce a bill to parliament that would allow the sale of part of the Royal Mail to a private company. Some MPs believe the legislation could be published as soon as next week.

TNT, a Dutch firm, has confirmed that it is interested in taking a stake in Royal Mail, investing as much as £3 billion for around a third of the company.

The Government says the part-privatisation is needed to modernise Royal Mail's operations, helping it cope with falling demand for postal services and soaring pension costs.

However, the plan has met with fierce opposition from trade unions and Labour MPs.

Some 122 of Labour's 350 MPs have signed a Commons motion opposing the private sector plan, declaring that "to sell a minority stake in Royal Mail which would risk fracturing one of Britain's greatest public service".

Compass, a left-wing Labour pressure-group, is also campaigning against what it calls the Government's plan to "break up the postal service". The group will hold a 'Keep the Post Public' rally in London on Tuesday.

The Conservatives have said they will support the Government plans in Parliament but the scale of the Labour rebellion is such that ministers believe their bill could still be lost.

Under its so-called Universal Service Obligation, Royal Mail is legally committed to collecting and delivering letters and parcels six days a week.

The Government says it is committed to retaining the obligation, including the Saturday delivery.

But Pat McFadden, the postal services minister, said that the privatisation plan is "necessary" to doing so.

"Unlike in the United States, dropping the Saturday service is not a route that we want to go down. For the first time, our USO is loss-making, but we believe it is valuable to the public and to small businesses," Mr McFadden said.

"We want to maintain it and to make the changes necessary to do so."

John Grogan, a Labour MP opposed to the part-privatisation, said that it is actually the Government plan that poses the greatest threat to six-day deliveries.

The Department for Business has estimated that dropping Saturday deliveries could save Royal Mail £270 million a year. Mr Grogan said that could lead private operators to cut back on deliveries.

He said: "If you look at the seven European countries where they have a part-privatised service, none have a six day delivery. Any company that gets part of Royal Mail might well see dropping Saturdays as a way of making more money."

[dvbuk55]

How would selling a third of Royal Mail save Saturday deliveries? Whatever profit was made would only be two thirds of what it would be without the sale. I can't understand how an influx of 3 bn is going to help in the long term. The fact that we need to cut costs is not in dispute, the fact that the pension fund is possibly 9bn in debt is also not in dispute, but there is surely a simpler method of improving finances without a third party.

If Royal Mail was to include the CWU in meaningful dialogue without the pre-requisite of privatisation as part of the agenda and put forward how they see the future of the business including closures and work performance then a rolling plan to achieve this could surely be agreed.

What we need as a minimum basis for discussion is for the Government to underwrite the pension deficit without the inclusion of a third party. They have spent billions on greedy bankers but for a company they own outright and from whom they have received billions over the years they want more than a pound of flesh.

On the one hand this Government is taking a majority shareholding in companies and banks and the one company they already own they want to sell a share of - bloody ludicrous. I do fear that if this legislation comes before parliament it will indeed be passed. Any spin offs detrimental to the current workforce will be blamed on having to include a third party in any agreements.

[DGP1]

Typical, bluff and bluster, everything to mis-direct the public

[oypostie]

They must be getting worried. Time for the threats

[banner18]

How is a short term 3 billion pound investment going to secure a long term USO. The 3 billion will not very likely be spent on the USO for starters. What a load of tripe this all is. The USO is only making a loss now because before, RM used their lucrative contracts and deliveries to offset against less lucrative deliveries like rural. Now instead of this money being used to maintain a public service, it is now going into a few profiteer's hands because they have cherry picked this lucrative part of the business but not taken on any of the obligations of the USO. What a disgrace to now turn around and say that privatising will solve the problem, this is going further down the same road which will see the service destroyed. If they had a referendum on this issue, they know the public would not accept this but instead they will force it through by slight of hand and hope that joe public will just put up or shut up once the service deteriotes to crap. The sad fact is that the British public will probably just put up with it and the powers that be know this. So sad......

[resperin]

LOL as been said, blatent bs to get the public to care less when the w*****s decide to privatise us

[BELIAL]

Agree with all the above, empty threats of the worst kind , crass and crude political act ,they really are none too sophisticated these neu liebour bullyboys
If anything a part privatized RM would be far MORE likely to drop the Sat. delivery. You show me any PLC who would turn it's nose up at upping it's profits by £270 million overnight.

[k979aaa]

The USO can be changed at a whim by a UK government minister while the rest of Europe still plays by the old rules something stinks is it Cow PAT McFadden or is there a whole heap of sh*t in NEW LABOUR!. How can a government elected by the people for the people be against the people in one word greed and more greed!. It is up too us all to form a new WORKER'S PARTY as NEW LABOUR has too many spiv's and profiteers and benefactors of the rich and famous for worker's of the world!. We should unite as one and all and face down this capitalist catastrophe unleashed upon the workers of the world!. Those who said communism did not work have been proved wrong once and for all!. WE AS THE PEOPLE OF THIS NATION SHOULD DECIDE THE FUTURE AND COURSE OF OUR NATION NOT SOME GREEDY BANKER IN THE EUROPEAN UNION OR THE UNITED STATES OF AMERICA!.