Government backs mail sell-off
The government has said it accepts a report’s recommendation that the Royal Mail should be part privatised.
The government has said it accepts a report’s recommendation that the Royal Mail should be part privatised.
The study by Richard Hooper says new minority owners can offer the “confidence, experience and capital” needed to carry out vital changes.
Describing the current Royal Mail as “untenable”, the report adds that the universal service is under threat without modernisation.
Dutch firm TNT said it would be interested in a stake in Royal Mail.
The report’s findings were presented by Business Secretary Lord Mandelson, who confirmed that the government agreed with its recommendation that the service be part-privatised.
Lord Mandelson added that the government also agreed with its second recommendation that the government take over responsibility for reducing the mail service’s pensions deficit.
‘Volatile’ pension deficit
Mr Hooper, a former deputy chairman of media watchdog Ofcom, found that as a result of new communication technologies such as e-mail, the Royal Mail had missed out on a potential £500m of profits over the past year.
The study said that the Royal Mail needed to modernise urgently, and introduce more automation.
Regarding the Royal Mail’s pension deficit, the report estimated it at £280m, describing it as “large, growing and volatile”.
It recommended that the government should take over responsibility for this, but that this should only come as part of a wider reform of the service.
The report added that labour relations needed to improve, that levels of trust and cooperation between managers and workers was low, and that industrial action took place too often.
Meanwhile, up to 2,000 postal workers are to stage a 24-hour strike later this week in a row over office closures.
The Communication Workers Union said its members in Liverpool, Coventry, Stockport, Oxford, Crewe and Bolton would walk out on 19 December – the day before the last Christmas posting day for first-class letters.
