Tag: Royal Mail

Government approves Royal Mail takeover by Czech billionaire

UK Government reaches legally binding agreement with EP Group that protects Royal Mail’s workers and key services whilst keeping it headquartered in the UK

  • Business Secretary reaches agreement with Royal Mail’s prospective new owners after in latest example of government working hand in hand with private sector to improve crucial public services.   
  • Agreement backs Government’s Plan for Change, creating the strong foundations needed in Britian’s supply chain to kickstart economic growth and deliver for workers.  
  • Deal protects workers and key services whilst seeing Royal Mail continue to be headquartered in Britain, securing jobs and tax receipts in the UK.  

The Business Secretary, Jonathan Reynolds, has today [16 December] received legally binding commitments from Royal Mail bidder Daniel Křetínský that are intended to secure the long-term, sustainable future of Royal Mail whilst protecting crucial services for millions of customers across the UK.  

This significant agreement, between the Department for Business and Trade and Daniel Křetínský’s EP Group, contains commitments that protect, and secure investment in, Royal Mail’s postal network which is important to everyone from small business owners in Southampton to online shoppers in Shetland.  

These commitments deliver on the Government’s Plan for Change, kickstarting economic growth by providing stability to a national institution that strengthens the foundations of Britain’s domestic supply chain and delivers better public services to people across the whole country. 

Business Secretary Jonathan Reynolds said: “For too many years progress on securing a stable future at Royal Mail has stalled, but from day one we have been committed to providing a secure future for thousands of workers and customers. 

“Today’s agreement is yet another example of this Government’s commitment to working hand in hand with business to generate reform give respite to people right across the UK, as we are working towards ensuring a financially stable Royal Mail with protected links between communities other providers can’t reach.

“I’d like to thank EP Group and Daniel Křetínský for their constructive approach to our discussions and their commitment to protecting this national icon. I look forward to working with them to fix the foundations and ensure Royal Mail continues to deliver for the communities and businesses who rely on it most.”

Recognising the importance of Royal Mail as an iconic national institution, the government has negotiated a ‘Golden Share’ which will ensure that, with very limited exception, the headquarters of Royal Mail cannot be moved abroad and that Royal Mail cannot change where it pays its taxes, in either case without UK government approval.   

These restrictions will apply to any future owners of Royal Mail and, alongside other commitments to the brand and cypher, secure Royal Mail’s identity as an iconic British institution whilst also allowing it to operate as a fully private company without day-to-day government interference.  

EP Group have also committed to honour any new agreements entered into with the postal unions, recognising that workers should be placed at the heart of a sustainable Royal Mail.   

After months of constructive engagement, these legally binding commitments were voluntarily offered by EP Group in recognition of the significant contribution that Royal Mail makes to Britain’s national identity and the importance that it has in everyday life in the UK.   

EP Group Chairman Daniel Křetínský said: “EP Group is very pleased to have reached this historic agreement with the Business Secretary to safeguard the future of Royal Mail, under EP Group ownership.   

“We would like to thank the Business Secretary for the constructive negotiations that have resulted in unprecedented commitments and undertakings that demonstrate the high regard EP Group has for Royal Mail as an institution, the service it provides to millions of UK homes and businesses, and Royal Mail employees.  

“EP Group is a long term and committed investor with a mission to make Royal Mail a successful modern postal operator with high quality service and products for its customers. We look forward to delivering on this mission alongside our partners in government.”

Millions of small businesses and consumers across the country rely on Royal Mail for everything from magazines to medicine deliveries, which is why protecting its future following any takeover is critical.   

The commitment we have offered include significant financial safeguards including assurances around financial investment and restrictions on value extraction linked to the financial strength of the Royal Mail business and the achievement of specific service level standards.  

Today EP Group has also announced that it has reached negotiators’ agreements with the unions representing Royal Mail’s workforce.

The Government welcomes the negotiators’ agreement and is confident that the constructive and collaborrative approach between the unions and the buyer can represent a restart for Royal Mail. 

Postal Services Minister Justin Madders said: “We have agreed these commitments with EP Group with the intention of securing the best outcome possible for Royal Mail’s customers, incentivising high performance and protecting the important services communities rely on.  

“Royal Mail’s workers will also play a crucial role in getting the company back on track, and I’m pleased that EP Group and the CWU have worked quickly to reach an agreement on their part in the takeover. 

“A sustainable Royal Mail is a successful Royal Mail, and through this agreement we’re paving the way towards a brighter future where it can be a source of national pride once again.”

Communication Workers Union General Secretary Dave Ward said: “We are pleased to have reached a negotiators settlement with EP Group covering crucial areas such as job security, the governance of the company, a meaningful stake in the business for employees, restoring quality of service, legally binding commitments and improving the terms and conditions of our members. 

“This agreement provides the foundation to rebuild Royal Mail. These have been challenging negotiations but through the support of our members we have delivered what by any measure is a groundbreaking agreement which puts postal workers and customers back at heart of everything Royal Mail does.”

ROYAL MAIL GROUP TAKEOVER BID – NEGOTIATORS AGREEMENT REACHED BETWEEN CWU AND EP GROUP

Dear Colleagues 

Further to last week’s national briefing, CWU branches, reps and members would have seen this morning’s announcements setting out that EP Group and the government have reached agreement on a deed of undertaking, which contains legally binding guarantees from EP Group over the future of Royal Mail. 

In light of this development, CWU is pleased to announce that we have reached a groundbreaking negotiators agreement with EP Group, subject to ratification by our Postal Executive. 

The key parts of the agreement covers:

•Job security commitments and new legally binding commitments to employees 

•Agreed principles on resolving a range of outstanding issues 

•The introduction of a radical new governance and business model

•A meaningful stake in the business for employees

•Restoring quality of service •improving the terms and conditions of our members.

•A commitment to a new plan to grow the business

•A complete re-set in employee and industrial relations. 

Ultimately the CWU will always campaign for Royal Mail to be returned to public ownership – but the reality is once it became clear the government would support this takeover – our role as a trade union was to do everything possible to protect our members.

Whilst many will fear Royal Mail falling into the hands of a foreign equity investor, the truth is every postal worker knows the status quo is what will kill off postal services in the UK.  The Royal Mail Group Board have been running the company into the ground over a sustained period and in the process have completely alienated their own workforce. It is time for a fresh start and a complete re-set of employee and industrial relations.

At this stage, the transaction is not completed and still has some formal stages to go through which include:

•Clearance under the national security act

•Clearance under European regulations

•Shareholders vote

It is likely that all of these processes will be cleared in the first quarter of 2025. 

NEXT STEPS FOR CWU

Subject to the document being cleared by our Postal Executive, we will be putting together a comprehensive engagement package this week including briefings for our branches, reps and members. 

We will issue further updates in due course. 

Yours sincerely,

Dave Ward  General Secretary 

Martin Walsh  Deputy General Secretary

St Mary’s Episcopal Cathedral features on Christmas postage stamp

ST Mary’s Episcopal Cathedral in Palmerston Place are delighted to announce that they feature on Royal Mail’s Second Class Christmas postage stamp this year!

CHRISTMAS stamps for 2024 from Royal Mail feature original illustrations of five UK cathedrals: St Mary’s Episcopal Cathedral, Edinburgh; St Patrick’s Cathedral, Armagh; Liverpool Cathedral; St Deiniol’s Cathedral, Bangor; and the RC Westminster Cathedral.

The Royal Mail’s director of external affairs and policy, David Gold, said at the launch: “Cathedrals are a hugely significant part of our cultural heritage and play an important role in local communities.

“They also offer space for peaceful reflection and a bit of an escape from the challenges of daily life, which can be especially important at Christmas.”

Designed by the British artist Judy Joel, the stamps were revealed for the first time today – 5 November.

Royal Mail described the five buildings as “some of the most spectacular cathedrals in the UK”, highlighting the first, Edinburgh, designed by Sir Gilbert Scott and consecrated in 1879, as “boldly harking back to upwardly soaring medieval Gothic cathedrals, with its three spires dominating Edinburgh”.

Royal Mail worked closely with Janet Gough, formerly director of cathedrals and church buildings for the Church of England, and an authority on historic churches. Ms Gough said: “These special stamps are a reminder that, for centuries past, cathedrals have provided sanctuary, community, joy, and wonder at the birth of Christ”.

“And they continue to do so today, standing at the very heart of our cities. All the UK cathedrals will be open over Christmas, ready to welcome people of all faiths and none. For services, prayer, and celebration, to find peace, or to enjoy the splendour of their music, architecture, and treasures, visit a cathedral this Christmas.”

The stamps, together with a range of collectibles, are now on sale.

Why not visit St Mary’s Cathedral this Christmas? https://tinyurl.com/49zxue2u

Royal Mail postal service MUST modernise, says Ofcom

  • Ofcom calls for national debate on future of UK’s postal service, as letter volumes halve since 2011
  • Options for reform include changing letter delivery speed or days, as other countries have done, but not downgrading delivery targets
  • Second Class stamps will remain affordable option as price cap continues

The universal postal service risks becoming unsustainable as people send fewer letters and receive more parcels, meaning reform is necessary to secure its long-term future, according to evidence set out by Ofcom today.

Postal services and postal workers remain essential to those who rely on them. Eight in 10 people (79%) say some things will always need to be sent by post. And three quarters of those who use postal services (74%) say they rely on the post for letters.

However, while Royal Mail’s obligations have not changed since 2011, letter volumes have halved and parcel deliveries have become increasingly important. Given the significant cost to Royal Mail of delivering the universal service, there is an increasing risk it will become financially and operationally unsustainable in the long term.

Given these challenges, Ofcom is today inviting views on a range of options for redesigning the universal postal service to secure its future, while ensuring it reflects the way people use it. Under any scenario, Royal Mail must modernise its network, become more efficient and improve its service levels.

Ofcom’s research shows that people want to get what they pay for. But people are not currently getting a reliable service because of Royal Mail’s recent poor performance, for which Ofcom fined the company £5.6m last year. We will continue to hold Royal Mail to account and expect it to turn things around as a matter of urgency.

Options for reform

At this stage, we are not consulting on specific proposals to change the universal service obligation (USO). Some of the options, which are detailed in full in our document, would require Government and Parliament to change primary legislation, while others could be made through changes to our regulations.

The two primary options we have set out are:

  1. Making changes to existing First and Second Class and business products so that most letters are delivered through a service taking up to three days or longer, with a next-day service still available for any urgent letters.
  2. Reducing the number of letter delivery days in the service from six to five or three. This would require Government and Parliament to change primary legislation.

Ofcom estimates that Royal Mail could achieve a net cost saving of £100m-£200m if letter deliveries were reduced to five days; and £400m-£650m if reduced to three days. If the large majority of letters were delivered within three days, it could achieve net cost savings of £150m-£650m.

Downgrading delivery targets is not an option for reform. In fact, it will be important to consider whether additional safeguards are necessary to ensure people’s needs are fully met. Any changes must improve existing levels of reliability.

Changing the specification of the universal service is likely to be preferable to using a subsidy to maintain the existing levels of service and products, given it no longer aligns with the way people use it; although this would ultimately be a decision for Government.

What do postal users want?

Fewer delivery days could still meet most people’s needs, according to what postal users have told us. Nine in 10 people (88%) say reliability is important for letter deliveries, compared to 58% for delivery on Saturdays (down from 63% in 2020).[7]

Most participants in our research were also open to reducing some services and standards – particularly for letters – in the interests of keeping prices down and only paying for what was required. Similarly, there was strong acknowledgement that most letters were not urgent, but people still needed to have a faster service available for the occasional urgent items, even if that meant paying a premium for it.

The UK is not alone in needing to respond to these challenges. Across Europe and more widely, universal postal service obligations have been, or are being, reformed. Other countries have reduced the frequency of delivery or extended delivery times for letters – including Sweden in 2018, Belgium twice since 2020, and Norway and Denmark twice each since 2016.[

Dame Melanie Dawes, Ofcom’s Chief Executive, said: “Postal workers are part of the fabric of our society and are critical to communities up and down the country. But we’re sending half as many letters as we did in 2011, and receiving many more parcels. The universal service hasn’t changed since then, it’s getting out of date and will become unsustainable if we don’t take action.

“So we’ve set out options for reform so there can be a national discussion about the future of universal post. In the meantime, we’re making sure prices will remain affordable by capping the price of Second Class stamps.”

Next steps

Ofcom is inviting views from interested parties by 3 April 2024 on their analysis and the options for reform, to understand the potential impact on people and businesses. This includes vulnerable people, those in rural and remote areas of the UK’s nations, as well as large organisations who use bulk mail services.

We will hold events in the coming months to discuss the evidence and options, bringing together a range of people and organisations with different perspectives. After carefully considering the feedback, we will provide an update in the summer.

Capping Second Class stamp prices

To make sure the universal service remains affordable, Ofcom periodically reviews whether stamp prices should be capped. In doing so, we must consider the impact of any cap on the financial sustainability of the universal service. We set our last cap in 2019 and have reviewed prices for the period April 2024 to March 2027.

Royal Mail continues to be the UK’s only door-to-door deliverer of letters on a national scale. This means we cannot rely on competition to ensure prices remain affordable.

So we have retained a safeguard cap on second class letters. On average, these prices can rise by no more than inflation (CPI) from today’s prices. Dashboard

Postal workers union CWU Deputy General Secretary Postal Martin Walsh told BBC Radio 5 yesterday that the OFCOM report ‘has turned into a shambles’.

“This OFCOM report is dead before it even comes out tomorrow. We need a proper debate on postal services that actually involves the people that keep it going – our members.”

General Secretary @DaveWardGS on Radio 5 this morning responding to the OFCOM report: “The regulator have no credit whatsoever. There is no chance postal workers of the customers will accept a 3 day USO or manipulation of the products to avoid legislation.

Ultimately it will be for the government to decide what changes will be made.

They are adamant that Saturday deliveries are ‘sacrosanct’ and want to see the continuation of a six day service.

LET’S HAVE A NATIONAL DEBATE …

Royal Mail fined £5.6m for missing delivery targets

Ofcom has fined Royal Mail £5.6m for failing to meet its First and Second Class delivery targets in the 2022/23 financial year.

Under Ofcom’s rules, each year Royal Mail is required to deliver 93% of First Class mail within one working day and 98.5% of Second Class mail within three working days, and complete 99.9% of delivery routes for each day on which a delivery is required.[1]

In 2022/23, Royal Mail’s reported performance results showed that it had only delivered 73.7% of First Class mail on time and 90.7% of Second Class mail on time, and completed 89.35% of delivery routes for each day on which a delivery was required.

Ofcom can consider evidence submitted by Royal Mail of any exceptional circumstances that may have explained why it missed its targets. Even after adjusting Royal Mail’s performance for the impact of industrial action, extreme weather and the Stansted runway closure, its First and Second Class performance was still only 82% and 95.5% respectively.[2]

This means that Royal Mail breached its obligations by failing to meet its targets by a significant and unexplained margin. This caused considerable harm to customers, and Royal Mail took insufficient steps to try and prevent this failure.

So we have decided to impose a fine of £5,600,000 on Royal Mail. The penalty includes a 30% reduction from the penalty we would otherwise have imposed, which reflects Royal Mail’s admissions of liability and its agreement to settle the case. The financial penalty is payable to HM Treasury within two months.

Ian Strawhorne, Ofcom Director of Enforcement, said: “Royal Mail’s role in our lives carries huge responsibility and we know from our research that customers value reliability and consistency.

“Clearly, the pandemic had a significant impact on Royal Mail’s operations in previous years. But we warned the company it could no longer use that as an excuse, and it just hasn’t got things back on track since.

“The company’s let consumers down, and today’s fine should act as a wake-up call – it must take its responsibilities more seriously. We’ll continue to hold Royal Mail to account to make sure it improves service levels.”

Prioritisation and issues in the operation of delivery offices

As part of our investigation, we considered concerns about how parcels and letters might be prioritised for delivery.

In the evidence we assessed, we did not identify any suggestion that Royal Mail’s senior management had directed the prioritisation of parcels over letters outside of recognised contingency plans, such as during the pandemic and during the industrial action in 2022/23.

However, we are concerned that Royal Mail appears to have insufficient control, visibility and oversight over local decision-making at certain delivery offices where high absence and vacancies may have led to customer operations managers – who are responsible for individual delivery offices – making “on the day” decisions about what to deliver.

Given ongoing high absence and vacancies, and delays in bringing service levels back up, we are concerned about the operation of delivery offices, which we view as fundamental to Royal Mail meeting its delivery targets.

Royal Mail must ensure its customer operations managers are provided with appropriate training, so they are equipped to make such decisions. We will be keeping a close eye on the company’s performance this year, and the steps it is taking to return delivery offices to pre-Covid practices.

A non-confidential version of our decision will be published in due course.

Liam Byrne MP, Chair of the Business and Trade Committee, has called for Royal Mail to deliver changes to its operations on time, following news of the firm’s fine for missing post targets.

He said: “The Business & Trade Committee welcomes the robust action taken by Ofcom. In our report on Royal Mail, published earlier this year, we said that the company had systematically failed to deliver its statutory Universal Service Obligation, and called on Ofcom to investigate this issue.

“The Universal Service Obligation is not an aspirational target – it is a matter of pride for posties across the land, a crucial connection for people in isolated communities, and the cornerstone of Royal Mail’s contract with the public. Everyone in the UK must have access to a consistent postal service, no matter where they live.

“Royal Mail must make it clear how they will fix this issue and secure the future of the USO. Unlike its apparent approach to the public’s post, it is critical that Royal Mail’s future is delivered on time.”

Royal Mail responded: “We are very disappointed with our Quality of Service performance in 2022-23 and acknowledge Ofcom’s decision today.

“Last year was uniquely challenging for Royal Mail. Quality of service was materially impacted by the long-running industrial dispute which included 18 days of strike action.

“We are pleased that Ofcom has acknowledged that elements outside of Royal Mail’s control had a significant impact on service levels and has adjusted the figures to 82% for First Class and 95.5% for Second Class mail.

“Quality of Service is extremely important to us. We take our commitment to delivering a high level of service seriously and are taking action to introduce measures to restore quality of service to the level our customers expect.”

Remember to use up stamps without a barcode – not valid after 31 January

After 31 January, ‘everyday’ stamps without a barcode will no longer be valid. So, if you can find your old ones, this is your last chance to use them.

Or, if you prefer, you can swap them.

For more info visit http://RoyalMail.com/barcodedstamps

Deirdre Brock: ‘Royal Mail need to get back to the negotiating table’

SNP MP Deidre Brock has called on the Royal Mail to stop the threats of job cuts to postal workers and engage meaningfully with the Communications Worker Union to find an acceptable solution to prevent further postal strikes. 

In a joint letter from SNP MPs to the Chief Executive Officer of Royal Mail, the Royal Mail Chief was told that it is “unacceptable to see the language employed by Royal Mail in threatening its workforce with job losses because they dare to ask for a fair work package.”

Postal workers across the UK are on strike again today, with several more strike days planned for early next month, from the 2nd of November to the 4th of November.

Last week, the Royal Mail’s announced its intention to slash 10,000 jobs, citing the strike action and low parcel delivery sales as the reason. Deidre Brock MP has described this move as a “tactic” and has accused Royal Mail of “acting in bad faith”.

Ms Brock added: “Postal workers across Edinburgh North and Leith are struggling to make ends meet in the face of soaring energy and food costs while Royal Mail shareholders benefit from bumper profits in the millions.

“Royal Mail staff and their families need financial security. The decision to strike will not have been easy for any of them, but this is about more than pay; it is also about protecting the postal service we all rely on and value.

“Rather than making threats to workers, Royal Mail need to get back to the negotiating table – in a meaningful way – and put our communities at the heart of discussions.”

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CWU lambasts Royal Mail job cuts ‘scare tactics’

Postal workers union CWU has responded defiantly to an announcement by Royal Mail’s parent company International Distribution Services PLC’s that they plan to slash up to SIX THOUSAND jobs due to mounting losses.

The union says Royal Mail’s announcement is nothing more than ‘their latest misjudged scare tactic to threaten members into submission’.

CWU said: ‘We (CWU) will meet Royal Mail Group today because we continue to act in good faith. We will also bring you a fuller update from the unions leadership later as well.’

#StandByYourPost

CWU General Secretary Dave Ward said: “The announcement is the result of gross mismanagement and a failed business agenda of ending daily deliveries, a wholesale levelling-down of the terms, pay and conditions of postal workers, and turning Royal Mail into a gig economy style parcel courier.

“What the company should be doing is abandoning its asset-stripping strategy and building the future based on utilising the competitive edge it already has in its deliveries to 32 million addresses across the country.

“The CWU is calling for an urgent meeting with the Board and will put forward an alternative business plan at that meeting.

“This announcement is holding postal workers to ransom for taking legal industrial action against a business approach that is not in the interests of workers, customers or the future of Royal Mail. This is no way to build a company.”

No mail today: Posties strike over pay

Royal Mail postal workers are striking today in a dispute over pay. It is the first of four days of planned industrial action, with further walkouts also scheduled for 31 August and 8 and 9 September.

Letters will not be delivered on strike days and some parcels will be delayed.

Posties overwhelmingly rejected a pay increase offer of 5.5% with conditions attached. The CWU union, which represents the postal workers, is calling for a pay rise that more closely reflects the current rate of inflation.

Royal Mail has apologised to customers and said it has contingency plans to minimise the disruption.

It said: “We’re really sorry for the disruption that this strike action is likely to cause to you. We want to reassure you we will do everything we can to minimise disruption and get our services back to normal as quickly as possible.

“Royal Mail has well-developed contingency plans, but they cannot fully replace the daily efforts of its frontline workforce. We will be doing what we can to keep services running, but customers should expect significant disruption.”

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#standbyyourpost

Posties set for strike action

In a statement issued yesterday, Royal Mail said: ‘The CWU has informed Royal Mail that they will call upon their members to undertake strike action on the following dates: 26 and 31 August and 8 and 9 September 2022.

‘Royal Mail believes there are no grounds for industrial action. Royal Mail is ready to talk further with the CWU to try to avert damaging industrial action but it must be about both change and pay.

‘We have contingency plans in place, and will be working hard to minimise disruption and get our services back to normal as soon as we can to keep people, businesses and the country connected. Meanwhile you can continue to send your parcels and letters and we would encourage you to post early in advance of these dates.’

CWU Scotland no2 Branch Secretary Gary Clark said: “I have said a lot about our dispute with Royal Mail and the reasons for strike action but it really comes down to greedy management and shareholders who want to drive our membership into the ground.

“Some of our members are already using food banks but it’s even further that the physical nature of the job now it will mean many members will suffer in the years to come and in retirement too.

“We must fight like we have never fought before for now but also for the future

“This will be a constant battle and we must now also fight for renationalisation and take the greed of capitalism out of our business – only then can we go forward and property look after the long term future of all our members.”