Tag: sell-off

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

Government pushes ahead with Royal Mail sell-off

postalQueen of the privatisers Margaret Thatcher thought the better of doing it, then New Labour’s Peter Mandelson tried but failed to do it but now it seems that it’s going to be third time unlucky as the coalition government moves to sell off the Royal Mail … a national asset that belongs to all of us:

Business Secretary Vince Cable told MPs yesterday: “Now the time has come for government to step back from Royal Mail, allow its management to focus wholeheartedly on growing the business and planning for the future. It’s now time for employees to hold a stake in the company and share in its success. This government will give Royal Mail the real commercial freedom it’s needed for a long time.”

Around 150,000 staff will be offered free shares when Royal Mail – one of the world’s oldest postal services – is sold off. It’s expected that the company will be worth snywhere between £2.5 – 4 billion when it is floated on the stock market later this year

Mr Cable said privatisation was necessary to ensure that universal service, which currently guarantees delivery to all parts of the country six days a week, can continue. Th government also says that the sale will give Royal Mail the access to private capital it needs to grow and remain competitive.

Royal Mail is currently refocusing it’s business priorities, targetting parcel delivery to cash in on the rapid growth of internet shopping as the number of posted letters falls due to the explosion of email. This change of emphasis saw Royal Mail more than double its profits last year after years of losses.

Ed Davey, minister for postal affairs, said the proposals ‘safeguard the future of both Royal Mail and the Post Office – two cornerstones of British life’, but there are many who are question whether the sell-off is either desirable or necessary – and industrial action looks likely.

Billy Hayes, general secretary of the Communication Workers Union, said: “The fact of the matter is the British public don’t want to see the Royal Mail privatised. Vince Cable is flogging this company to the very people he denounced at the Liberal party conference – the spivs, the speculators and those who just want to make a fast buck.” He went on: “Royal Mail is thriving in public ownership, increasing its profits, providing good quality services and decent jobs. We want it to remain that way. Privatisation would be a throwback to the tired old politics of the 1980s.”

Dave Ward, CWU’s deputy general secretary, said he expected members to be balloted before the end of September. “We will be balloting for strike action, we’ve already adopted that policy. I expect that policy to be ratified by the conference of the union at the end of July. That’s about our members’ terms and conditions, I want to make that clear. It’s about what we fear will happen with Royal Mail as a private operator – what we want is a legal binding agreement that protects their terms and conditions, their contracts of employment, their pensions, for the foreseeable future.

“I don’t think our members will be bought off by the free share issue,” he added. “I believe our members are too long in the tooth not to know the dangers of privatisation.”

Speaking after the announcement North and Leith Labour MP Mark Lazarowicz said: The Government has nationalised Royal Mail’s liabilities in the form of the pension fund in which there was a large shortfall and is now intent on privatising the profits. It argues that it is necessary to subject Royal Mail to commercial discipline and give it access to private sector capital but Royal Mail’s overall operating profits more than doubled over the last year from £152m in 2011-12 to £403m in 2013-13!

“A privatised Royal Mail might continue to operate the universal service provision of delivering 6 days a week to anywhere in the UK for the same price but for how long if its commercial rivals don’t have to? As with the East Coast Main Line, ideology seems to have won out over common sense – it will be private investors who benefit from its commercial success not the taxpayer or customers.”

POSTMAN PAT to join the picket line?
POSTMAN PAT to join the picket line?