Royal Mail 'exaggerating its losses'

The Royal Mail was accused yesterday of exaggerating its losses to justify plans to make 30,000 workers redundant.

Dave Ward, the deputy general secretary of the Communication Workers Union (CWU), said the organisation was underplaying its profitability because it also wanted to minimise an "upfront" pay rise. The union is calling for a parliamentary inquiry.

A ballot of 160,000 postal workers is expected to show next week a big majority in favour of industrial action.

Mr Ward said that although the company's overall losses were £611m this year, the "core" letters business recorded a profit of £66m.

The union accused the Royal Mail of "one off" costs in its profit and loss accounts to make the deficit larger. Mr Ward said management had included the cost of redundancy payments that had not yet been made. An investment of £600m in a computer system had been represented as part of the losses.

Officials at the union indicated that negotiations over a pay offer, which the union says guarantees postal workers 4.5 per cent over 18 months, would resume in the next few days. Mr Ward said there was a "good chance" of a settlement.

A spokesman for the Royal Mail said the pay offer was worth 14.5 per cent over 18 months if employees agreed productivity measures. He said there was no question of the organisation misrepresenting its financial position. "The accounts give a true and accurate picture of the situation and they have been very rigorously audited." He said that apart from sales to stamp collectors and the "special delivery" guarantee for mail, the core business was loss making.