Postal strike

[inky pete]

Yer don't get it Inky: if it's a public service - it wouldn't need to "make a profit"

 

If they don't make revenues in excess of their costs how would you plan to plug the multi-billion pound shortfall in their pension fund which came about during the years and years of loss making?

 

That nice Mr. Taxpayer again, by any chance?

 

That would mean we would have to pay to use the service and, as mail volumes drop (which they will!), pay through our taxes to NOT use it. As people continue to send and receive fewer and fewer letters we'll have to pay more and more for something we all use less and less, while at the same time listening to the CWU dinosaurs threatening strike action every time the subject of getting rid of people whose jobs have become redundant comes up.

 

If Royal Mail was even a little bit efficient it would have WON the business that the likes of TNT and UK Mail came in and tendered for. Royal Mail had every possible advantage in its favour at the time - existing network, economies of scale, existing customer relationship, competition which had absolutely no track record in this country, and total control over the "final mile" of the delivery network. It didn't, and that's due in no small part to the inflexible stance taken by the CWU over many years.

 

This is a rapidly shrinking business in a generally shrinking market, there will have to be job loses and changes in working practices.

[Mary]

Our US Postal Service is no longer a part of the government and it seems to work pretty well? But then again there is FED EX and UPS that also work well - so a person has a choice.

[Paul Kennedy]

I regularly have to order Virgin rail tickets from their charityline department ( peaktime tickets at off peak prices), I asked if I could arrange for them to be collected at the station by the traveller, they then quoted a much higher price...how daft is that given the current problem. In the end had to agree to paying ?6 extra for special delivery.

[observer]

Inky, the pinnicle of the private sector principle - "the Banks" have just been bailed out by the tax-payer WHEN IT SUITS; so the idea that the tax-payer shouldn't own and control essential public services for the even access, distribution and affordability to said tax-payer is a fairly logical conclusion. Simple market forces would dictate variable costs, if you live in a City or Town it's cheaper and more profitable - live in a rural area, and the costs and thus charges will increase.

[Paul Kennedy]

How about 'Service to the Public'

 

That the public is using less frequently.

 

 

Actually I rather like Royal Mail, however I can foresee that in order to maintain a universal service and to control overheads, the daily service might well reduce to a service every two days.

[observer]

.... in response to market forces, and the profit motive.

[inky pete]

Simply defining something as a public service and pumping in large quantities of taxpayers money does not excuse inefficiency and wastefulness, quite the opposite in my opinion.

 

A profit making business which is doing well and generating a good return for its stakeholders can sometimes be excused a little inefficiency in its processes.

 

A loss making, taxpayer supported one has a duty to wring the absolute maximum possible value out of every single pound which it receives. There's no justification for outdated practices and equipment, over manning, or inflexibility just because the taxpayer is picking up the tab.

 

The simple fact is that with modern equipment and work practices the Royal Mail would not need nearly as many people as it currently employs and still be able to provide a universal service across the whole of the UK which is fit for purpose.

 

It's pretty irrelevant whether it's a public or a privately owned business, it's in a mess, it needs to modernise to survive, and the CWU is standing in the way. This is possibly because the vast majority of CWU members work for Royal Mail - it's never really represented "Communication Workers" as a whole - and if the number of people working for Royal Mail shrinks substantially, then the union might find itself having to do what many other unions have had to do and merge with someone else or disappear.

[observer]

Now your entering a slightly different concept - efficiency and value for money: which can be applied to both the private and public sector, but efficiency isn't another word for exploiting a workforce or for cutting safety corners.

[wolfie]

A loss making, taxpayer supported one has a duty to wring the absolute maximum possible value out of every single pound which it receives.

 

The postal workers, have this year doubled annual profits to ?321m,

 

The Royal Mail also offers a service at half the price of its privatised rivals,

 

BTW the CWU is already a merged union.

[Paul Kennedy]

Alas it wouldn't be a profit if funding the pension deficit is taken in to account. It is estimated that the deficit is in the region of ?7 billion...or approximately 20 times last year's annual profit.

 

PS With regards to value for money, being able to send a letter from the top of Scotland to the bottom of England for 39p next day service, does to me, seem to represent very good value for money.

[inky pete]

It was also just an operating profit of ?321million, on a turnover of ?9.5billion - in other words, an operating profit margin of just 3.4%, or just ?1800 per employee.

 

This was before the costs of the staff Sharesave scheme were taken out - which dropped the profit to ?237million. Other exceptional items reduced it further to ?183million.

 

Then there were financing and pension interest costs of ?134million, and finally taxation of ?278million.

 

So the much vaunted "profit" was actually a loss of ?229million - almost ?100million more than the losses in the previous year.

[Bazj]

How on earth can you have a pension deficit of ?7 Billion????? How much pension do retired posties get?

[Lt Kije]

Maggie gave them a pension holiday

[inky pete]

How on earth can you have a pension deficit of ?7 Billion????? How much pension do retired posties get?

 

The value of the investments held by the fund has taken a nose dive in the recent economic climate - as have most pension funds. The problem is compounded by the fact that the Royal Mail still have a final salary pension scheme, and the size of the anticipated liabilities the fund faces will rise dramatically as life expectancies continue to increase.

 

Hence the shortfall, the difference between the current projected long term value of the fund and the current anticipated long term liabilities. If global stock markets bounce back and we get a sufficiently prolonged period of strong economic growth then there's no problem, if not then the fund will require massive injections of cash from the profits of the business or else it will run out of money.

[observer]

Perhaps the posties could give up their pitifull pensions in favour of similar bonus payments to bankers?! Ooops, forgot to add "MPs" too!

[Paul Kennedy]

How on earth can you have a pension deficit of ?7 Billion????? How much pension do retired posties get?

 

There are a lot of posties / retired posties who have the potential to live a long time.

[Paul Kennedy]

Maggie gave them a pension holiday

 

and this Government imposed a tax on pension schemes,

[vic]

She didn't give the posties a pension holiday. She gave the employer a pensions holiday - i.e. the taxpayer - so the taxpayer should make up the deficit. You can't blame employees for wanting their pension rights when they've paid in their contributions and the employer hasn't.

[asperity]

I would really like to sympathise with that view Vic but as I work in a private industry where the employer hasn't paid any contributions to my pension OR National Insurance since 1986 I find I can't, sorry. This is, I'm afraid, the real world. Can't find an emoticon that just shrugs so "SHRUG"

[observer]

Best bet for posties, is to become MPs if they want a good pension. - like the Home Sec!

[LymmParent]

Am I being naive if I ask whether sacking all the postal workers reduces the long-term pension liability and does away with the deficit?

[vic]

I would really like to sympathise with that view Vic but as I work in a private industry where the employer hasn't paid any contributions to my pension OR National Insurance since 1986 I find I can't, sorry. This is, I'm afraid, the real world. Can't find an emoticon that just shrugs so "SHRUG"

Did you know when you got the job that they wouldn't contribute to a pension? And how does any employer avoid NI?

[Paul Kennedy]

Am I being naive if I ask whether sacking all the postal workers reduces the long-term pension liability and does away with the deficit?

 

No, a reasonable question. Sacked workers would still be entitled to a pension based on their service up to the time that they were sacked. So yes it might well reduce the long term liability but it wouldn't do away with the deficit. Liability and deficit are the subject of actuarial calculations based upon a number of assumptions one of which is life expectancy. With regards to Royal mail, as it is state owned, its pension scheme is underwritten by the taxpayer, which actually creates a privatisation problem.

[Paul Kennedy]

I would really like to sympathise with that view Vic but as I work in a private industry where the employer hasn't paid any contributions to my pension OR National Insurance since 1986 I find I can't, sorry. This is, I'm afraid, the real world. Can't find an emoticon that just shrugs so "SHRUG"

Did you know when you got the job that they wouldn't contribute to a pension? And how does any employer avoid NI?

 

Regarding NI, maybe due to the status of mariners and ownership of vessel etc.

[asperity]

I would really like to sympathise with that view Vic but as I work in a private industry where the employer hasn't paid any contributions to my pension OR National Insurance since 1986 I find I can't, sorry. This is, I'm afraid, the real world. Can't find an emoticon that just shrugs so "SHRUG"

Did you know when you got the job that they wouldn't contribute to a pension? And how does any employer avoid NI?

 

They used to, but in 1986 they "flagged out" to the IOM so they could reduce their liabilities i.e. employer's pension and NI contributions. I had the choice of putting up with it or making myself unemployed. Hmm difficult decision that!