TO:
JUDY BRITTON ci Simon Lancaster
Alastair Macdonald
FROM: David Sibbick
Martin Brebner
Nigel Lees
Jan Wright
Mike Whitehead
MR JOHNSON’S MEETING WITH NEVILLE BAIN & JOHN ROBERTS: 8
NOVEMBER
I attended Alan Johnson's regular meeting with Neville Bain and John
Roberts this morning. It was agreed to make these monthly in future. The next
date is 2 December when John Roberts will bring Richard Dykes to give the
Minister a presentation on Mount Pleasant. Neville Bain can’t make this and
wants to hold on to 16 December for the moment. They also invited the
Minister to join the Board for lunch after one of its monthly meetings and he
accepted. (This is now fixed for 11 January at noon.)
Strategy and Profit Target
2. Mr Johnson said Alastair and I had given Neville Bain and John
Roberts a feel for the problems Ministers had been wrestling with in the
aftermath of the Party Conference. He believed that the way ahead was now
largely freed up. The Bill would be in the Queen’s Speech on 17 November as
a priority item. Our aim was to endorse the thrust of the Strategic Plan and set
the profit target between then and the end of the month.
3. John Roberts said their half year results which they were planning to
issue after the Board meeting on 30 November would be down on last year
before adjustment for Horizon. They were seeing reduced growth in volume of
traffic - 3.5% compared with 4.5% planned and 4% actual a year ago. Half
year profits before adjustment would be £130m, about £50m down on last
year. The main focus, however, was likely to be the Horizon adjustment. They
intended to agree a fully common PR line with the Department.
Board Bonus
4. John Roberts said they were in discussion with Jan Wright on this. I
said that the principle of the approach Jan had tabled was fully agreed
between DTI and Treasury at official level. Assuming the Post Office were
content, it remained for the Treasury to talk their new Minister through the
issues.
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Board Contracts
5. I explained that this had become caught up in the other issues of which
they were aware. We were working to free it. Neville Bain commented that
there was no logical connection. I agreed and said the connection was
accidents of timing.
Regulator & Profits
6. The Minister said he and the Secretary of State were happy to put
something in the Bill requiring the regulator to have regard to have regard to
Post Office profits and targets. He asked me whether there was a problem. I
said that the Bill would be able to specify duties on the regulator and we were
working on wording. What it could not do was tell the regulator how to
interpret his duties. Neville Bain said he accepted this.
Price Increase
7. John Roberts said they were looking at 1p on the 1st class mail and
holding 2nd class steady. They had planned to introduce it in March or April,
bearing in mind that they had to give POUNC three months’ notice. They
were, however, looking at how to advance, given that the Bill would already
be going through the House by then.
8. The Minister commented that it was three years since the last increase
and that had been caused by an EFL hike. Neville Bain had already
suggested (off the cuff and to John Roberts’ surprise) announcing on 30
November and linking to the Horizon provision. This was left up in air.
ial Relati
9. John Roberts gave the Minister a tabulation of days lost through
industrial action during October saying that it exceeded the figure for the year
to end-September. The Minister was clearly concemed and noticed both
unexpected participants and the non-involvement of London. John Roberts
said they thought London was conserving itself for Mount Pleasant. He could
not prove anything but found it difficult to believe that there were no
messages passing round and no coordination.
PIU Study/Horizon
10. Mr Johnson encouraged John Roberts to make personal contact with
the PIU team and give them all the cooperation they needed. Their report
would be key. He envisaged the Horizon Working Group coming to their
conclusions in parallel. POCL’s revised offer to the Benefits Agency now
opened the way to serious new discussions. He had written to Alistair Darling
and would be meeting Jeff Rooker, who brought a fresh mind to the subject,
this evening.
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12. John Roberts said that they actively wanted a rapprochement based
on acceptance by both sides that ACT was the way forward. He assured the
Minister that the Post Office had had no hand in the weekend articles in the
News of the World and elsewhere about prospective PO job losses related to
Benefits Agency plans. They thought the origin was probably the Federation
of Sub-Postmasters.
Bill
13. The Minister said it would be important that the Bill was well prepared
and secured as smooth a passage as we could obtain for it. Discussion in
Legislation Comittee had pointed up that pressure on the timetable would
very likely mean one or two bills falling by the wayside. The Bill would have
priority but draft legislation which required substantial amendment after it had
been introduced began to make itself look vulnerable. John Roberts said they
would cooperate in every way possible.
EU
14. John Roberts said he had had recent exchanges with the French Post
Office and Derek Hodgson about the prospect that the Commission would, as
its next step, seek to drive monopoly down to around the 50p level. There
seemed to be acceptance of this. Derek Hodgson appeared resigned to the
prospect as long as it applied to everyone. (Judy Britton subsequently told me
that the CWU in fact hope to ensure the Brussels process grinds slowly
through combined resistance from several Member States.)
DEREK DAVIS