take over

[dvbuk55]

So a privatised Royal Mail could not or would not deliver a USO service in the UK and not only would Offcom and the Government facilitate this but so would the EC while still requiring a USO to be provided in every other member state? As far as I can tell the USO in many of these countries is provided by one or more privately owned companies as part of a long term business model. How is it possible that they can do it but RM couldn't?

I don't know that they couldn't do it I just don't think that it will be a priority.

[fishtank]

How is it possible that they can do it but RM couldn't?

Financially they have been able to continue to deliver the USO largely by reducing labour costs significantly.
Most have moved to a part-time model.
In some countries rural areas are served by collection points in towns and villages,not a doorstep delivery.
Some have moved to zonal pricing.
Some have moved to a two tier workforce.
Very few,in fact none that I can think of have continued to provide the same level of service for the same cost to customers they did in public hands.

For someone in your position none of those changes might seem apocalyptic but we're not stupid,we know who will take the brunt of the inevitable cost cutting that will come after privatisation.

[cloherty1976]

Being realistic do most posties really worry about the service or do they care more about there take home pay ?

[dvbuk55]

Being realistic do most posties really worry about the service or do they care more about there take home pay ?

Well IMO one is the same as they other really, how many posties would survive the TNT delivery model?

[UnhappyGremlin]

As far as I'm aware, the Government intends to retain a minority holding, meaning they will offload a minimum 41%.
I believe they have also already said there will be a further issue in the following 12 to 18 months, if the IPO goes as planned (they believe it will be a huge success).

The 10% in employees hands would be irrelevant. If, after another sale in the future, any single company or group gets hold of 51%, they control it, and can do as they wish.
If it comes down to a vote, the majority shareholder would always win.
It wouldn't matter if the Government kept 39%, they may try and influence any majority shareholder, but it would ultimately be whoever has the controlling interest, that would and could make any choice they see fit.
The only issue would be that, if they tried to get rid of the USO, the Government could threaten them with re-nationalisation to prevent this, but then, the Government could do this anyway. Question is, would they?
I think not.

If any one group or person gets to a particular level of shareholding, I believe 90%, then they are required (by law?) to make an offer to buy up the remainder of the shares, and can de-list from the FTSE.

As you know, no owner of RM can unilaterally "get rid of the USO". The USO is enshrined in law and can only be changed by primary legislation. The Government doesn't need to retain any share of RM to influence the owner because it has a regulator to do this. Any refusal by a privatised RM to meet the obligations of the USO would be met by action by the regulator - probably fines which would hit shareholders in the pocket. Re-nationalisation wouldn't come into it.

Talking crap again.
Reading between the lines again. Adding 2 and 2 and coming up with 5.

Laws can be changed. I never, at any point, mentioned any kind of unilateral action, by any company or owner.
Never said the Government NEEDED to retain a share to influence the company. It is YOUR OPINION that re-nationalisation wouldn't come into it. I used it as an example of how the Government COULD force any new owner to comply with the USO.

The USO will go in my opinion. At some point, if privatised, the board or any new owner/majority shareholder would, over a period of time, put pressure on the regulator and try and gain Government influence should they retain a stake long term, to reduce the USO terms to a more favourable stance, and remove it totally in time. It may be a long process, but it will happen. It is one the areas where cuts can be made for profits to be increased.

The USO is up for renewal in 2021. The new board will use that fact nearer the time (if have not tried long before then) to get concessions. Who else could take on the USO licence? No one.
They will get the terms reduced, and I think removed totally in time.
They'll claim unsustainability, costing too much, unfair on them when these rules aren't put on other carriers.
Even if terms remain the same, they'll ask for subsidies. Which I also believe is inevitable in time.

Remember, Royal Mail ownership was 'enshrined in law', until a couple of years ago, it would have been impossible to contemplate selling it. Now it isn't. And it also isn't JUST a Government decision to sell it. There are many outside influences at work here, and I don't just mean the EU. There are big businesses and wealthy people pushing for this, all mates with people in Government.

Well you say ...

" ... any single company or group gets hold of 51%, they control it, and can do as they wish. If it comes down to a vote, the majority shareholder would always win.
It wouldn't matter if the Government kept 39%, they may try and influence any majority shareholder, but it would ultimately be whoever has the controlling interest, that would and could make any choice they see fit. The only issue would be that, if they tried to get rid of the USO, the Government could threaten them with re-nationalisation to prevent this, but then, the Government could do this anyway. Question is, would they? I think not."

Perhaps you are just "accidentally" conflating the issue of control of RM as a company with the ability to change the USO but they are your words saying that a majority RM shareholder "can do as they wish" and the Government could threaten re-nationalisation (although you think they wouldn't) if RM "tried to get rid of the USO". So what happens then? Does the USO change or stay the same simply because RM wants it to and the Government won't renationalise? Neither RM wishes or the Government's attitude to re-nationalisation will cause the USO to change.

If the Government wants the USO to stay the same then it stays the same. It doesn't need to "threaten" RM with anything because it's the law. RM can "claim" anything it likes but the USO will only change if parliament (not the Government) agrees by passing primary legislation. Given the number of MPs that are supposed to oppose privatisation I am surprised that you believe that such legislation would definitely be passed. I am sure you also know that the review of the USO in 2021 is a review of whether RM remains the designated provider of the service not what the USO itself is.

I realise that your gloomy predictions for the USO etc are only opinions of what will happen. Of course these suit your wider anti-privatisation stance because they play to the legitimate concerns of people who might be affected by a change in the USO. I don't know what will happen to the USO or when and neither does anybody else. What I do know are the facts about what needs to happen for the USO to be changed and that it is in the control of the UK Parliament and nobody else.

I'm not accidentally conflating anything. Again you are interpreting everything to suit yourself, and your arguments (as am I).
The USO is different to most normal business decisions. Everything that is separate to the USO will be changed at will by any owner, of that I have no doubt.
When it comes to the USO, I firmly believe that, over time, the new owner would chip away at it citing unsustainability. It would take time, but I believe they'd get their way.

If the Government wants the USO to stay the same, it will?
Don't think so. Any private owner that sees their profitability going down the drain, would ask for subsidies. The Government would say no, and compromise. They wouldn't want the privatised company to fail, or be seen to be failing, as most of the public would view it as proof that the privatisation was wrong in the first place.
I also think that, when reviewed, any new owner would ask for terms to be relaxed, and if refused, would respond by telling the Government to issue the USO licence to someone else. Knowing full well, there is no one else that CAN provide it. No other company can possibly expand to fulfil that role between now and then. So while, as you say, it is only a review to designate WHO provides the USO, there is really only one option. Placing all the bargaining chips in one corner, making a reduction of the terms inevitable.

[UnhappyGremlin]

Being realistic do most posties really worry about the service or do they care more about there take home pay ?

Take home pay.

But under a privatised RM, there will be a lot less of us taking that pay home.

[cloherty1976]

But under a privatised RM, there will be a lot less of us taking that pay home. Why do people worry about something that has not happened and may not happen. Think positively and your be alot happier. If it does happen then worry about it..

[UnhappyGremlin]

But under a privatised RM, there will be a lot less of us taking that pay home. Why do people worry about something that has not happened and may not happen. Think positively and your be alot happier. If it does happen then worry about it..

I'm not worrying about it.
And rather than wait until it happens, I prefer to try and prevent it happening at all.

[cloherty1976]

I'm not worrying about it.
And rather than wait until it happens, I prefer to try and prevent it happening at all.[/quote] Prevent what you don't know what's going to happen you just think you know.

[TrueBlueTerrier]

But under a privatised RM, there will be a lot less of us taking that pay home. Why do people worry about something that has not happened and may not happen. Think positively and your be alot happier. If it does happen then worry about it..

I'm alright jack - thats what the Daily Mail preaches and thats what makes me sick - thanks for the show of solidarity.

[aiden01]

But under a privatised RM, there will be a lot less of us taking that pay home. Why do people worry about something that has not happened and may not happen. Think positively and your be alot happier. If it does happen then worry about it..

I'm alright jack - thats what the Daily Mail preaches and thats what makes me sick - thanks for the show of solidarity.

sure we all know clohertys going in why worry not that I think most of us care

[cloherty1976]

[quote="TrueBlueTerrier"]

I'm alright jack - thats what the Daily Mail preaches and thats what makes me sick - thanks for the show of solidarity. . Calm down all I said is we don't know what's going to happen in he future!

[taxi4leighton]

the point i was trying to make is simply this.if a future owner challanged the USO in the Europen courts would they succeed?.im not a lawyer,but even I realise they must have a very strong case.their case that USO is an unfair burden and restricts their ability to compete fairly in the postal market.this must be obvious to anyone who works in RM

[Brain Fury]

the point i was trying to make is simply this.if a future owner challanged the USO in the Europen courts would they succeed?.im not a lawyer,but even I realise they must have a very strong case.their case that USO is an unfair burden and restricts their ability to compete fairly in the postal market.this must be obvious to anyone who works in RM

The point I was trying to make was the RM would have no hope of challenging the existence of the USO in the European Courts. This is because european law requires all member countries to provide a USO and in other countries it is provided by privately owned companies some of which are competitors to Royal Mail in the UK. Why would the european court allow Royal Mail to wriggle out of meeting USO obligations in the UK when for example it hasn't allowed TNT to get out of a USO in Holland (not that they have probably tried to)?

The minimum standard for the USO across Europe is slightly lower than in the UK but it certainly won't allow the reduction to delivery on say only 3 days a week and some of the other scare stories that people opposed to privatisation like to put around.

[Brain Fury]

How is it possible that they can do it but RM couldn't?

Financially they have been able to continue to deliver the USO largely by reducing labour costs significantly.
Most have moved to a part-time model.
In some countries rural areas are served by collection points in towns and villages,not a doorstep delivery.
Some have moved to zonal pricing.
Some have moved to a two tier workforce.
Very few,in fact none that I can think of have continued to provide the same level of service for the same cost to customers they did in public hands.

For someone in your position none of those changes might seem apocalyptic but we're not stupid,we know who will take the brunt of the inevitable cost cutting that will come after privatisation.

And that's the point isn't it - the issue isn't whether the USO is changed, it is what Royal Mail has to do to maintain it. So yes, IMO RM will definitely be looking to cut costs and already admitted the the workforce will be further reduced whether publicly or privately owned because the cost of providing the USO will be a cost reduction driver whatever happens and a failure to secure adequate external funding will at least match any pressure to deliver shareholder value.

As I've said all along there might be some tweaking of the USO within the limitation of the european standard but this is all speculation because nobody knows and of course there is absolutely nothing to stop this happening with RM continuing in government ownership. Of course the speculation is useful if you're desperately trying to find another stick with which to beat the proposal of privatisation but some of the exaggerated claims for a 3 day per week delivery service etc go beyond speculation into self serving fantasy.