LTB 373/11 - Regulation Breakthrough

[Geezer]

CWU.org
13 April 2011

LTB 373/11 Regulation Breakthrough

No. 373/11
Ref : 21003
Date: 13th April 2011




TO: Branches with Postal Members






Dear Colleague


Regulation Breakthrough


At a meeting last week with the Minister Ed Davey the Union were advised that the Government were about to make some important changes to Regulation and other aspects of the Postal Services Bill.


Today, the Government has published details of the amendments they discussed with the Union last week. These include:-


· New powers for the regulator, Ofcom, to allow them to better monitor any potential threats to the Universal Service arising from end-to-end competition.

The Government explained that the purpose of this amendment is to curtail the potential for any cherry picking of end to end competition that would undermine the Universal Service. We understand that any end to end service provider will have to gradually meet performance standards set by the Regulator.


· A new requirement on Ofcom to have regard to the need for the Universal Service provider to earn a reasonable commercial rate of return on the provision of that service.

The Government has explained that Royal Mail will, in the future, be able to make a profit on its existing loss making USO products. This is dependent on Royal Mail publishing more transparent accounts to establish the real cost of the USO. It is unclear as to what that commercial rate of return will be and how it will be generated.


· Ensuring that Royal Mail can remain the sole provider of the Universal Service for at least the next ten years.

The Government has explained that this amendment is designed to close the loophole whereby Royal Mail could have been removed as the Universal Service provider following a review by the Regulator.


· Government reports more information to Parliament, including details of the ongoing commercial relationship between Royal Mail and the Post Office.

The Government has explained this will assist in creating a sustainable inter-business relationship between Royal Mail and the Post Office. This falls short of an inter-business agreement but we understand parliament will have the opportunity to receive regular reports on the ongoing nature of the relationship.


· Parliament has the opportunity to scrutinise and vote on proposals for the mutualisation of Post Office Ltd in the future.

This means that any final decision on mutualisation would need to go back to parliament.


The Union recognises these amendments as welcome and important developments. They have been achieved as a direct result of our campaign and ongoing dialogue with the Government. However, we also acknowledge that on Regulation there remains a lot of work to do in order to achieve a genuinely level playing field.


There has been a definite shift toward fairness but it remains the case that the historical damage cannot be reversed and that regulatory powers are still open to interpretation.


Furthermore, whilst it appears this package of measures is designed to create a future environment for downstream access to be commercially negotiated, we are not at that point and it is crucial that we continue to focus on the importance of fair regulation both now and in the future.


The Union will be considering these developments in more detail, including their likely impact on Royal Mail’s revenue streams, the role the Regulator will now play and the further steps we will need to take.


We have attached copies of the Government’s published amendments and press release and also the Union’s press release.


It is important that Branches covey the content of this LTB to all CWU Representatives and our members in the workplace.


Further information will follow in due course.




Yours sincerely



Billy Hayes Dave Ward
General Secretary Deputy General Secretary (P)







13 April 2011

For immediate release

CWU welcomes amendments to Postal Services Bill

The Communication Workers Union today welcomed the amendments to the Postal Services Bill published by BIS. The union has been campaigning to protect the universal service obligation (USO) and the future of post offices and the amendments to the Bill go some way to reflecting those aims. The union has been in dialogue with BIS Ministers and has briefed MPs and Lords on these issues consistently over recent months. In acknowledging that the amendments go some way to support both the USO and the future of post offices, the union is clear that more needs to be done.

Billy Hayes, CWU general secretary, said: “We warmly welcome these amendments from the Minister to the Postal Services Bill. We have been campaigning hard to safeguard the UK’s universal postal service and to secure both mails services and the post office network. We are pleased that the Government has taken on board some of our concerns and we will continue to campaign and have dialogue with government to strengthen the Bill in other areas including more necessary work on regulations. The amendments on the universal service and the commercial relationship between Royal Mail and the Post Office have been key campaign aims for the union and we are delighted the Government has listened. We are looking for a clearer commitment to an inter-business agreement between Royal Mail and the Post Office, but this is a good step towards that aim.”

Dave Ward, CWU deputy general secretary (postal) said: “The union recognises these amendments as welcome and important developments. They have been achieved as a direct result of our campaign and ongoing dialogue with the government. However, we also acknowledge that on regulation there remains a lot of work to do in order to achieve a genuinely level playing field."

The CWU has consistently raised concerns about unfair regulations and the adverse impact on Royal Mail’s finances.

“There has been a definite shift toward fairness, but it remains the case that the historical damage cannot be reversed and that regulatory powers are still open to interpretation. The union will continue to focus on the importance of fair regulation now and in the future,” Dave Ward added.

Notes to editors:

The union has met with Government Ministers and the union understands the impact of the amendments to be as follows:

· New powers for the regulator Ofcom, to allow it to better monitor any potential threats to the universal service arising from end-to-end competition.

The Government explained that the purpose of this amendment is to curtail the potential for any 'cherry picking' of end-to-end competition that would undermine the universal service. We understand that any end-to-end service provider will have to gradually meet performance standards set by the regulator.


· A new requirement on Ofcom to have regard to the need for the universal service provider to earn a reasonable commercial rate of return on the provision of that service.

The Government has explained that Royal Mail will, in the future, be able to make a profit on its existing loss-making USO products. This is dependent on Royal Mail publishing more transparent accounts to establish the real cost of the USO. It is unclear as to what that commercial rate of return will be and how it will be generated.

· Ensuring that Royal Mail can remain the sole provider of the universal service for at least the next 10 years.

The Government has explain that this amendment is designed to close the loophole whereby Royal Mail could have been removed as the universal service provider following a review by the regulator.

· Government reports more information to Parliament, including details of the ongoing commercial relationship between Royal Mail and the Post Office.

The Government has explained this will assist in creating a sustainable inter-business relationship between Royal Mail and the Post Office. This falls short of an inter-business agreement, but we understand Parliament will have the opportunity to receive regular reports on the ongoing nature of the relationship.

· Parliament has the opportunity to scrutinise and vote on proposals for the mutualisation of Post Office Limited in the future.

This means that any final decision on mutualisation would need to go back to Parliament.

The union has campaigned against the sale of Royal Mail but has specifically campaigned around the need for fairer regulations, an inter-business agreement between Royal Mail and Post Office Limited and a long-term sustainable protection of the USO. In recent months, the union has met many coalition MPs and Lords. Further amendments are tabled in the House of Lords. An Early Day Motion tabled in the House of Commons on safeguarding the USO has received 162 signatures including 47 coalition MPs.

The report stage in the House of Lords is set for May 4th

CWU has been working with PR company PSA to campaign on the Postal Services Bill.



-Ends-

For more information please contact:

Sian Jones, Press Officer, Tel: 020 8971 7267, Mobile: 0779 3314249, E-mail: sbjones@cwu.org

Kevin Slocombe, Head of Communications, Mobile: 07714504413, E-mail: kslocombe@cwu.org



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[tomangoe]

I thought the CWU were opposed to any form of Privatisation ! It seems from Billy and Dave's response that everything's ok with Privatisation now that the CWU has through it's anti -privatisation campaign secured some. "Welcome ammendments to the BIll". So the Union has given up then?

[labbloke]

I agree, this is a kick in the teeth for members fighting to keep out of the hands of private providers,

ps, in order for the new private RM to make a profit on its USO, then prices to post will have to rocket or will the company say down the line that to make money a five day a week USO is needed, just like Europe,

Havent said this before but perhaps its time for the OLD guard to move over and let some real trade unionists to represent our wishes.

[fishtank]

You can't blame the union for trying to cover both eventualities.
Anything less would be slaughtered by the membership if or when privatisation became a reality.
It's very difficult to build in protection after the fact.
Sometimes you have to face up to something you don't want to happen....happening...and try to make the best of it.

[Lincox]

But Fishtank, is that not a bit like New Labour. Make yourself a centre stream party to become electable and forget all about whom and what the old Labour Party was about. Again this stinks of self survival for the union heirarchy and sod the grass roots and how privitisation will impact on us.

[Danelectro]

'They have been achieved as a direct result of our campaign and on going dialogue with the government'
any changes are more to do with Moya Greene than those lovely lads at the Broadway.

[Big Daz]

I recall posts on this site having a pop at the CWU for not stopping DSA/ unfair and incompetent regulation/postcomm.

Yet when the CWU claim "they" have a little bit of victory they get knocked

I have no doubt that the PSB will be passed, what its final form will look like after amendments are voted on is yet unkown.

That is only the first hurdle, the government will then decide whether to go for a sell off to another company or a IPO, if the former then a buyer needs to be found and the transaction to take place within the remit of the final shape of the PSB.

Report stage will be very interesting when amendements will be put to the vote, not every amendment will be laid dowm by the governmnet so the final shape of the PSB may not be to their tatse but it wil be the will of parliment.

[Big Daz]

'They have been achieved as a direct result of our campaign and on going dialogue with the government'
any changes are more to do with Moya Greene than those lovely lads at the Broadway.

I think you are right to a certain extent since Moya started speaking out their seems to have a been a shift in opinion among the parlimentary politicians especially in the House of Lords where Lib Dems and Conservatives are speaking out against the status quo on DSA/Regulation/POSTCOM. The government of the day now find themselves being hammerred for want of a better term from all sides.

[dvbuk55]

A more level playing field only seems to be on the agenda now that someone else is about to reap the rewards and being, almost, guaranteed carte blanche, to name their price in order to make a profit............years too late, if those same provisions had been made previously we wouldn't need to be privatised....................so it's a case of fighting the good the fight after the horse has bolted.

[Cut Off King]

The Government explained that the purpose of this amendment is to curtail the potential for any cherry picking of end to end competition that would undermine the Universal Service. We understand that any end to end service provider will have to gradually meet performance standards set by the Regulator.


· A new requirement on Ofcom to have regard to the need for the Universal Service provider to earn a reasonable commercial rate of return on the provision of that service.

The Government has explained that Royal Mail will, in the future, be able to make a profit on its existing loss making USO products. This is dependent on Royal Mail publishing more transparent accounts to establish the real cost of the USO.

Who would have thought that the Labour party would bring in changes to undermine the RM and that the Consevatives would lead the charge to make the postal market a more level playing field

Edit = " Maybe its time to switch the political levy to the Tory party"

[Lincox]

They do not need any political levy. IWA the Tory party Coffers will be laiden with gold by the eventual purchaser of RM.