Special Report:SECTION 4 CWU ALTERNATIVE BUSINESS MODEL

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SECTION 4 CWU ALTERNATIVE BUSINESS MODEL


As we move to the next stage of our strategy it is the right time to develop further an alternative to privatisation. The Postal Executive has looked at this previously and in conjunction with our Research Department we have discussed some outline business models. The Postal Executive has now agreed that as part of the Save our Royal Mail Campaign we should pursue a new business model structured around the following parameters:

• The Royal Mail Group should be a ‘not for dividend company’ with profits reinvested back into services and the workforce. It would operate for public good, balancing its social obligations with commercial opportunities.

• The company would be able to access capital by borrowing on the commercial markets without this contributing to Government debt. Network Rail is a perfect example of this. By creating a new Board structure it has been able to borrow over £27 billion in recent years. A fully modernised Royal Mail with proper employee alignment will also be able to self finance some of its own investment. Neither the Government nor the company can put forward any rational argument as to why this type of structure could not access capital.

• There would be a company charter set out in legislation that would confirm Royal Mail as the USO provider and act as a locking mechanism against any further attempts to alter the structure of the company. The charter would set out a list of ethical principles and values that the company would be bound by, including its approach to employee and industrial relations.

• There would be an overhaul of the governance structure and the main Board representatives would be balanced between appointees with social, commercial and ethical responsibilities. The Unions could nominate a small number of Board members, but not from within their organisations.

• The company would implement the High Pay Commission recommendations with a fixed pay differential between what Board members, Senior managers and the workforce earn.

• The company would operate single status benefits from the top to the bottom. Incentive schemes would relate to a fixed percentage of people’s overall salary.


The Union’s task is to articulate the potential for a credible alternative. The detail of this is something that could be developed subsequently. By bringing this ingredient into the campaign our overall position will become stronger.

RECOMMENDATION 4: That the CWU campaigns for an alternative to privatisation along the policy lines stated.