Royal Mail facing more job cuts, admits minister

Further job losses are likely as part of the modernisation of Royal Mail, Business Minister Pat McFadden said today.

Both Royal Mail's management and the unions recognised that fewer people would work for the state-owned company in future, he said.



Union dissatisfaction over the Royal Mail's modernisation programme, pay and job cuts last year led to wildcat strikes followed by a series of official walkouts.



At Commons question time, Mr McFadden said: "During the dispute before Christmas we kept in touch with both sides, encouraging an agreement on modernisation of Royal Mail.



"These talks are continuing and I believe that in the context of falling mail volumes and the greater use of new technology both Royal Mail and representatives of the workforce understand that there are likely to be fewer people working for Royal Mail in the future than there are today."



Labour's John Robertson (Glasgow NW) said he was "disappointed" that Mr McFadden was not taking a more active role in talks between the Royal Mail and the unions.



Mr McFadden said the Government had put a "considerable" amount of money into the Royal Mail.



But the company's multi-billion pound pension deficit was an issue for the Royal Mail to tackle, he said.



The Government was forced to ditch legislation that would have seen the state bail out the pension deficit as part of a package involving the part-privatisation of Royal Mail.



In the face of opposition from Labour MPs and the Communication Workers Union, Business Secretary Lord Mandelson dropped the legislation, claiming that market conditions meant it was not the right time to find a buyer for a share of Royal Mail.



Mr McFadden said the Government had made clear the pension bailout was part of that package and "not something that items can be picked out one by one".



Shadow business minister Jonathan Djanogly said: "Royal Mail requires urgent structural reform if it and its employers are going to move forward.



"However the unions and Labour backbenchers have forced a weak Government to pull the Postal Services Bill.



"So what, other than Conservative government, is going to deliver any action for reform?"



Mr McFadden told him: "We did not proceed with the Postal Services Bill because the market conditions did not allow us to get the best value for money for the taxpayer."



The Tories would privatise the Royal Mail, Mr McFadden said, adding: "That is not our proposal, it wasn't our proposal in the past."



The Royal Mail last month reported an increase in its half-yearly operating profit by £7 million to £184 million despite a continuing decline in the number of letters posted.



Profits were up by 4 per cent in the six months to September, when deliveries in some parts of the country, including London, were hit by unofficial strikes.



The daily postbag averaged 72 million, down by three million from the previous year and 12 million fewer than in 2006.



About 5,000 jobs were cut in the period, bringing the total to 60,000 since 2002 through voluntary redundancy or natural turnover, leaving a workforce of 171,400.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: HR Benefits Manager

£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

Recruitment Genius: Office Manager / Financial Services

£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...

Jemma Gent: Year End Accountant

£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...

Jemma Gent: Management Accountant

£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...

Day In a Page

The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn
Yvette Cooper: We can't lose the election. There's too much on the line

Yvette Cooper: We can't lose the election. There's too much on the line

The shadow Home Secretary on fighting radical Islam, protecting children, and why anyone in Labour who's thinking beyond May must 'sort themselves out'
A bad week for the Greens: Leader Natalie Bennett's 'car crash' radio interview is followed by Brighton council's failure to set a budget due to infighting

It's not easy being Green

After a bad week in which its leader had a public meltdown and its only city council couldn't agree on a budget vote, what next for the alternative party? It's over to Caroline Lucas to find out
Gorillas nearly missed: BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter

Gorillas nearly missed

BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter
Downton Abbey effect sees impoverished Italian nobles inspired to open their doors to paying guests for up to €650 a night

The Downton Abbey effect

Impoverished Italian nobles are opening their doors to paying guests, inspired by the TV drama
China's wild panda numbers have increased by 17% since 2003, new census reveals

China's wild panda numbers on the up

New census reveals 17% since 2003