Postal workers want more pay

The Royal Mail and the Communication Workers' Union (CWU) had spent the afternoon and early evening at the arbitration and conciliation service Acas.

Ballot papers were sent out to union members on Wednesday afternoon but Royal Mail bosses warned a yes vote would be "commercial suicide".

The two sides are locked in a dispute over pay, with the CWU rejecting an offer of a 14.5% pay increase over 18 months on the grounds that it came with too many conditions attached.

Speaking after the talks collapsed, Royal Mail's chief executive Adam Crozier said the union had if anything "gone backwards" in its demands and so the talks had been "suspended".

In return the CWU accused the Royal Mail of treating it with "absolute contempt" and said it would be going ahead with its strike ballot.

Anger

"We gained no sense whatsoever in today's talks that the CWU was prepared to be realistic or to countenance suspending its ballot for strike action to allow some grown-up conversation to take place," Mr Crozier said.

It's quite clear that (the Royal Mail) came here with no intention of negotiating sensibly whatsoever Ray Ellis, CWU The issues behind the strike

"On a whole host of issues the union if anything has gone backwards today to a point where, on a number of areas, it is asking for more money than it previously was and on this basis the talks have been suspended.

"We remain absolutely committed to coming to a sensible and realistic deal. When the CWU is ready to talk sensibly and realistically then we'll be ready to talk at any time."

But unions denied that they were the ones blocking a deal.

"It's quite clear that (the Royal Mail) came here with no intention of negotiating sensibly whatsoever and we will continue with our ballot on that basis," said Ray Ellis of the CWU.

"They've treated the union with absolute contempt.

"We remain prepared to negotiate seriously when the business is prepared to do so."

Pay row

If you vote with the activists amongst the union against the deal... we begin the process of commercial suicide Allan Leighton, Royal Mail chairman

The union says the only guaranteed element in the Royal Mail's 14.5% pay offer would be a 3% rise from October, followed by a further 1.5% next April.

The Royal Mail's chairman Allan Leighton has sent a letter to all staff asking them not to strike.

"It's important that everyone understands that a vote to strike will result in a strike and that the company will not, at any stage, be able to improve its offer," he said in the letter.

"If you vote with the activists amongst the union against the deal -- or don't vote at all -- we begin the process of commercial suicide," he warned.

The row comes as the loss-making Royal Mail is struggling to cut costs and modernise in the face of growing competition from private sector postal operators.

The company, which has managed to trim its daily losses to about �750,000 from about �1.5m two years ago, wants to cut up to 30,000 jobs and scrap the second daily postal delivery in an effort to shore up its finances.