Core campaign messages ‘Let’s not throw it all away’

Balloting for industrial action If you vote for strike action you will end up taking strike action As Dave Ward stated in his own election manifesto: “I will not play with industrial action. If we ballot, we will mean it.” Recent history supports this; places that balloted for action and ended up taking action include Plymouth North Central DO, Dundee East DO As a business, Royal Mail will not negotiate under the threat of industrial action We are no longer a monopoly Customers are already leaving us under the threat of a ballot; more will go if we have a ballot and still more will go if we have a strike – and they won’t come back because they now have a choice Industrial action will be hugely damaging for Royal Mail – in terms of lost business, damaged reputation, fines and compensation – and will destroy the foundations we have built

Union relationship We have tried very hard to work with the union and we still want to involve them in transforming Royal Mail into a strong, successful business able to compete and win We will not de-recognise the CWU – we just want a constructive relationship that takes the business forward at pace Both the Chairman and the Group Chief Executive are spending two days with all our unit reps and their local managers, to talk about the future – including local consultation and joint training We have tried to involve the union in the strategy for over year including joint sessions with the EC and meetings with the senior operators We have sought input to the strategy over the last year and offered the CWU three test sites in which we will test their ideas – so far no ideas on the strategy or the test are forthcoming

People issues Our policy is that all job reductions amongst postmen and women are managed using voluntary redundancy or natural turnover and we have a great track record of doing just that Our policy is that we will never force our people to move from full- time to part-time working – not least of all because hours of work are a contractual right that can only be changed by mutual consent Many of people would like to be able to work in a more flexible way – as it will help them manage their personal commitments and lifestyles – and would welcome the choice

Pensions We have agreed a memorandum of understanding with the Pension Fund Trustees This commits us to funding the pension deficit over 17 years - with total pension contributions in 2006/07 of £735 million This is subject to the proposed Government funding being confirmed It is vital that we get the Government investment in the business - to protect our jobs and our pensions going forward A healthy pension fund is entirely dependent on a healthy business

Pay and productivity We’ve significantly increased postmen and women’s pay – up by 22% since April 2003 Our people have also benefited from Share in Success payments averaging £400 across the four years of the scheme This year’s 2.9% is a good rise for a business facing so many challenges – including falling volumes The productivity scheme has been a huge success with 90% of units signing up – this will allow us to put more money into basic pay for all our postmen and women - as well as local lump sums being paid out in units with big savings We started discussing pay back in October last year and by April we still couldn’t get agreement - we paid the money in May because we believed it wasn’t fair to ask our people to wait any longer for the money they were already earning We’re auditing the productivity savings with the Div Reps and discussing how it is paid out with the national union

We want to find a way to give people a real stake in the business We’ve asked the Government to look at giving us up to 20% of the Group to share with the people who work here This will allow people to share in the success of the business through growth in the share value alongside an annual dividend payment There will be an equal share for everyone This is not privatisation – we don’t want to see this business privatised and neither does the Government Over 80,000 people have expressed an interest in getting shares and we are confident that it will have a huge impact on the performance of the business if we all own a share Shares

The future We need to build a strong business so we can take on the competition and win To succeed we need to change and modernise – we know this is often painful – but we want to support our people through the process Success will mean we can continue to offer all the benefits and protection that we are so proud of providing for our people If we don’t change we will fail and job security, pay and pensions will all be at risk We want the union to work with us to help support people through change – but we cannot wait for ever – we need to move at pace