Royal Mail confrontation a step closer

The postal services bill cleared the Lords on 20 May –and is now on the way to the Commons where a major backbench rebellion could lie in wait.

The postal services bill cleared the Lords on 20 May –and is now on the way to the Commons where a major backbench rebellion could lie in wait.

The government is determined to part-privatise the Royal Mail by selling off a stake in the firm to a postal services provider, potentially Dutch firm TNT.

Unions have mounted a strong campaign against this proposal, arguing the sale would be the first step towards full privatisation.

They appear to have the backing of the public. A poll released by the Communication and Workers’ Union (CWU) suggested three-quarters opposed the government’s proposals.

Business secretary Peter Mandelson was in determined mood last night.

“Royal Mail is facing decline and it would be a dereliction of duty if we did not take action to secure the company’s future,” he said.

“The legislation has emerged stronger following the numerous debates in the Lords and the constructive and helpful input from peers.

“The government remains convinced that the huge challenges facing Royal Mail must be addressed by a comprehensive package of reform.”

The financial viability of the Royal Mail appears a key point for debate. Lord Mandelson has argued letter volumes are expected to fall by 10% every year and that its pensions crisis means it is “technically insolvent”.

The CWU pointed out it announced a £321m profit last week, however, claiming this is the first time all four arms of the business have turned in a profit in 20 years.

“The CWU will work with the government, the management and the public to ensure that Royal Mail is modernised as a public organisation to serve the nation’s interest,” its general secretary Billy Hayes said.