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| Version 1 | Version 2 |
|---|---|
| Royal Mail warns of pay freezes | Royal Mail warns of pay freezes |
| (10 minutes later) | |
| All Royal Mail staff face a pay freeze this year as the postal service tries to cut costs to ensure its survival. | All Royal Mail staff face a pay freeze this year as the postal service tries to cut costs to ensure its survival. |
| In a letter to trade unions, the company warned it was in a "very tight financial position" and might not be able to increase wages for any worker. | In a letter to trade unions, the company warned it was in a "very tight financial position" and might not be able to increase wages for any worker. |
| The government announced plans to sell off part of Royal Mail earlier this year, arguing this was the only way to safeguard the service. | The government announced plans to sell off part of Royal Mail earlier this year, arguing this was the only way to safeguard the service. |
| One union leader has said that any pay freeze would be "outrageous". | |
| Royal Mail is facing increasing competition from overseas private postal operators. | Royal Mail is facing increasing competition from overseas private postal operators. |
| And Business Secretary Lord Mandelson has proposed selling 30% of Royal Mail, but the government has said any such scheme would not be a sell-off but a "partnership". | And Business Secretary Lord Mandelson has proposed selling 30% of Royal Mail, but the government has said any such scheme would not be a sell-off but a "partnership". |
| 'Tough conditions' | 'Tough conditions' |
| The pay letter, sent by Jon Millidge, Royal Mail's human resources director, said: "The global economic turmoil has exacerbated the structural decline in postal markets in the UK and around the world, with the UK market now declining between 8-10% compared to last year. | The pay letter, sent by Jon Millidge, Royal Mail's human resources director, said: "The global economic turmoil has exacerbated the structural decline in postal markets in the UK and around the world, with the UK market now declining between 8-10% compared to last year. |
| "Given the tough economic conditions and with the retail price index currently being negative, you will undoubtedly be aware that many other companies find themselves in a similar position of having difficulty in affording increases in pay," his letter continued. | "Given the tough economic conditions and with the retail price index currently being negative, you will undoubtedly be aware that many other companies find themselves in a similar position of having difficulty in affording increases in pay," his letter continued. |
| Postal workers are first class - they don't deserve this second-class treatment Dave Ward, deputy general secretary, Communications Workers Union | Postal workers are first class - they don't deserve this second-class treatment Dave Ward, deputy general secretary, Communications Workers Union |
| As a direct result, "we do not envisage being able to increase pay rates for any colleagues (including all directors and managers) across the group," it concluded. | As a direct result, "we do not envisage being able to increase pay rates for any colleagues (including all directors and managers) across the group," it concluded. |
| Mr Millidge did, however, stress the fact that any previous commitments on pay would be honoured. | Mr Millidge did, however, stress the fact that any previous commitments on pay would be honoured. |
| Pension deficit | Pension deficit |
| Dave Ward, deputy general secretary of the Communications Workers Union, described any pay freeze as "outrageous". | Dave Ward, deputy general secretary of the Communications Workers Union, described any pay freeze as "outrageous". |
| "Postal workers are first class - they don't deserve this second-class treatment," he said. | "Postal workers are first class - they don't deserve this second-class treatment," he said. |
| "The Royal Mail posted its best financial results for years in December and outperformed all of its financial targets," he added. | "The Royal Mail posted its best financial results for years in December and outperformed all of its financial targets," he added. |
| In the nine months to Christmas last year, all four Royal Mail businesses were profitable for the first time in almost 20 years. | In the nine months to Christmas last year, all four Royal Mail businesses were profitable for the first time in almost 20 years. |
| Royal Mail Letters, the Post Office, Parcelforce Worldwide and the European parcels business GLS contributed to an operating profit of £255m. | Royal Mail Letters, the Post Office, Parcelforce Worldwide and the European parcels business GLS contributed to an operating profit of £255m. |
| But despite the improved performance, the Royal Mail remains short of cash, which is why the government is pressing ahead with plans to sell part of the service. | But despite the improved performance, the Royal Mail remains short of cash, which is why the government is pressing ahead with plans to sell part of the service. |
| Prime Minister Gordon Brown has said that the service's £25bn pension deficit in particular makes outside investment imperative. | Prime Minister Gordon Brown has said that the service's £25bn pension deficit in particular makes outside investment imperative. |
| But the government has maintained that the company will remain publicly owned. | But the government has maintained that the company will remain publicly owned. |