Royal Mail: Myth-Busters

[TrueBlueTerrier]

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ROYAL MAIL: MYTH-BUSTERS

Post Offices

Privatising Royal Mail means privatising the Post Office

No, it doesn't. Royal Mail and the Post Office are separate companies with independent Boards. Royal Mail is the company that delivers parcels and letters – the provider of the universal postal service. The Post Office is the nationwide network of branches offering a range of postal, Government and financial services. The Post Office is not for sale.

Privatising Royal Mail will lead to post office closures

No. The Post Office is a separate and distinct business with its own independent Board that now has the freedom to focus on growing its revenues and getting the most out of its branch network. In addition, the Government made a clear commitment
that there will be no post office closure programme. Instead, in 2010, we agreed funding of £1.34 billion over four years to maintain a network of at least 11,500 branches, and to modernise around 6,000 branches, bringing significant benefits to customers.

Post Offices will lose Royal Mail's business

That is pure scaremongering. Royal Mail and the Post Office are natural partners and the Chief Executive of Royal Mail has said it
would be "unthinkable" that there would not always be a strong commercial relationship between the two companies. A long term commercial agreement between the Post Office and Royal Mail for the continued supply of services was signed in 2012.

Private Capital not needed Royal Mail doesn't need any more money for modernisation

Royal Mail needs access to private capital, like any other large successful business, so that it can make the investment necessary to innovate and seize the opportunities presented by new markets – like the rapid growth of online shopping. Private capital for Royal Mail will be good for both business and consumers; it will be a more efficient, better capitalised, faster-moving company better able to meet the needs of its customers.

Royal Mail is a public sector success story

The Government has reformed the regulatory regime and removed Royal Mail's historic pension liabilities, and Royal Mail's interim results show that the company is on the road to sustained profitability. But this is only the beginning of the journey. Royal Mail will need new capital to adapt to the changing postal market and to seize new opportunities. Given limited Government resources and competing priorities, that capital can only come effectively from the private sector. Royal Mail should not have to compete for scarce public capital against other priorities such as schools and hospitals.

Upheaval of a sale will undo good work that has already been done

There is no reason why this should happen. The current and future modernisation of the business is necessary regardless of its ownership. The challenges of a changing postal market mean that Royal Mail has to have access to flexible capital to invest and
innovate.

There will be job losses to increase returns

The CWU has accepted that the modernisation of Royal Mail, for example more automation, means that the company needs fewer people. In the last 10 years of public ownership, 50,000 jobs have been lost in the company. Nobody wants to see job losses but, regardless of ownership, Royal Mail must continue to modernise and become more efficient.

Privatisations of postal operators overseas have been disastrous

Let's look at the facts:

Austria Post and Deutsche Post have delivered consistently high mail profitability since their flotations; for example their profit margins were 22% and 8% in 2011/12 respectively.

Deutsche Post is perceived as being at the vanguard of digital transition with innovative packets, e-retail and hybrid mail products.

Bpost (Belgium) has, since securing private capital in 2006, returned to profitability and has a profit margin of 15.2 %.

PostNL has delivered sustained high profit ability since its privatisation and is now dealing with some of the most difficult postal market conditions in Europe through restructuring.

Royal Mail's Heritage We will lose the Queen's head from stamps.

This is not true. Royal Mail is rightly very proud of its long-standing Royal association and there is no reason why it would want to change this. The Government included an additional safeguard in the Postal Services Act 2011 to ensure that the Queen's head remains on stamps regardless of who owns the company in the future.

Privatisation poses a threat to Royal Mail’s heritage.

Royal Mail is a trusted and valued brand, and it would make no commercial sense to dismantle it. Government has also legislated to protect Royal Mail’s heritage. We included a safeguard in the Postal Services Act 2011 to ensure that the Queen’s head remains on stamps regardless of who owns the company in the future. Royal Mail is also required by legislation to
report annually to Parliament on its heritage activities.

Universal Postal Service The Government’s regulatory changes do not protect the universal postal service from competition

The universal postal service is protected in statute – the Postal Services Act 2011 – and Ofcom has a duty to secure the provision of a six day a week, uniform price service. Competition is beneficial, but it should not undermine the provision of the universal
postal service.

TNT is already providing delivery services: if such competition is allowed, it will threaten the universal service

Competition can bring benefits to consumers but it should not, and will not, be allowed to undermine the provision of the universal service. This is why Parliament gave Ofcom a clear statutory duty to secure the provision of the universal service and for it to be financially sustainable. This is set out in primary legislation - the Postal Services Act 2011 - which gave Ofcom the power to intervene if the universal service is under threat.

Privatisation of Royal Mail will reduce services to rural areas

Regardless of ownership, Royal Mail will still be the UK's designated universal service provider and will continue to provide feliveries to all UK addresses – rural and urban – on a 6 days a week basis. Royal Mail will remain regulated by Ofcom and will have to comply with quality of service targets set by the regulator.

The Government intends to reduce the minimum requirements of the universal postal service when it privatises – it will
scrap the Saturday delivery

That is untrue. Regardless of ownership, Royal Mail will be the provider of the universal postal service. That service is protected in primary legislation – the Postal Services Act 2011 - and the Government has no intention of downgrading it. Six days per week delivery and collection at uniform and affordable prices are requirements protected in legislation. In fact, the Postal Services Act 2011 makes it harder for the level of the universal service to be downgraded:
only Parliament can change it

Stamp prices will go up

Royal Mail's stamp prices for the universal postal service will continue to be regulated by Ofcom which has a duty to ensure that they remain affordable. The prices of Royal Mail's non-regulated services will be subject to competitive pressures.

Service standards will fall if Royal Mail is privatised

Royal Mail is required to meet services standards which are set by Ofcom. This will still be the case whether Royal Mail is owned by the government or by the public or anybody else.

Businesses will be squeezed through price increases

Royal Mail values all its customers and will want to keep them. Prices for services used by businesses will be regulated by Ofcom or subject to competitive pressures.

Employee Shares

Any employee share scheme will be worthless like ColleagueShare

The employee share scheme, which Parliament has enshrined in statute, will not be the same as ColleagueShare. Real
shares will be allocated to the employee share scheme – meaning that employees will own at least 10% of the company by the time the Government sells its last share. Our objective in setting up the share scheme is to secure strengthened employee engagement in the company and to ensure that staff benefit through dividends from any future profits.

Services to the Armed Forces

A privatised Royal Mail will not want to continue to provide fee free services to the Armed Forces Free post to the armed forces does not depend on Royal Mail remaining in public ownership. These free services are available to service men and women who are undertaking operations such as those in Afghanistan. The Ministry of Defence fully reimburses Royal Mail for provision of these services.

Services for the Blind Services to the blind will be scrapped if Royal Mail is privatised

This government was the first to make services for the blind one of the minimum requirements of the universal postal service. We did this in the Postal Services Act 2011 because of the importance we attached to these services. Only Parliament can decide
to downgrade these minimum requirements.

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There will be job losses to increase returns

The CWU has accepted that the modernisation of Royal Mail, for example more automation, means that the company needs fewer people. In the last 10 years of public ownership, 50,000 jobs have been lost in the company. Nobody wants to see job losses but, regardless of ownership, Royal Mail must continue to modernise and become more efficient.


So in short!! Yes

[ebbzie]

Is this the latest sh*t from the courier ?
It seems to be about profits profits and profits , but only the those at the top will benefit , the workers will get shorter hours, lower pay poor contracts . Will the last full time worker to leave Royal Mail please turn the lights out

[fishtank]

Regardless of ownership, Royal Mail will be the provider of the universal postal service

That's bullshit.
What if they don't want to be the provider of the universal postal service?
What if they just want to be a parcel business?
How are you going to make them deliver the USO...gunpoint?

Royal Mail could hand in their license to operate the day they are privatised and nobody,not Ofcom and certainly not the Government could force them to provide anything.
The owner of the company will decide what the company does.

Most likely scenario will be a couple of years of relative stability then the whining will start that 6 days is financially unsustainable,along with threats that it could withdraw from the USO because it can't fund 6 days,after that pressure will be placed on Ofcom to look at the picture again and a recommendation for a reduction in services to protect the overall sustainability of the USO will go to the Secretary of State and it will be rubber stamped.
Why would it be rubber stamped by Parliament? ..because nobody wants the responsibility of sinking the USO.
Job done.

[motch]

Regardless of ownership, Royal Mail will be the provider of the universal postal service

That's bullshit.
What if they don't want to be the provider of the universal postal service?
What if they just want to be a parcel business?
How are you going to make them deliver the USO...gunpoint?

Royal Mail could hand in their license to operate the day they are privatised and nobody,not Ofcom and certainly not the Government could force them to provide anything.
The owner of the company will decide what the company does.

Most likely scenario will be a couple of years of relative stability then the whining will start that 6 days is financially unsustainable,along with threats that it could withdraw from the USO because it can't fund 6 days,after that pressure will be placed on Ofcom to look at the picture again and a recommendation for a reduction in services to protect the overall sustainability of the USO will go to the Secretary of State and it will be rubber stamped.
Why would it be rubber stamped by Parliament? ..because nobody wants the responsibility of sinking the USO.
Job done.

I think it will eventually go that way after a year or two. Just for example (not saying i'd want this to happen) imagine if everything for the week came in early hours of monday morning. You throw in all the walk sequenced trays, flats and packets take as much as you can. Would all be done by wednesday.

[UnhappyGremlin]

More propaganda.
A lot of what they say about USO and the PO network office levels etc., whilst required now will be changed, as the agreements in place now are due for review in 2014/15.

I think most of these busted myths will actually come true. PR overdrive has started.

[Danelectro]

Bpost (Belgium) has, since securing private capital in 2006, returned to profitability and has a profit margin of 15.2 %.

Austria Post and Deutsche Post have delivered consistently high mail profitability since their flotations; for example their profit margins were 22% and 8% in 2011/12 respectively.

BPost(51% state owned) and Deutsche Post (25% state owned) have so far avoided competition in their provision of the USO by implementing tough regulation making cherry picking nigh on impossible ,up until 2011 when it was over turned in the courts all mail companys vying for a part of the USO of Deutsche Post had to pay a minimum wage thus making competition an unattractive proposition for the likes of TNT-they also receive state subsidises so the comparison with the current government plans for Royal Mail seems way off the mark....