Royal Mail sell-off could still go ahead

The UK government has reiterated that plans to partly-privatise Royal Mail will go ahead once the current economic conditions improve. A government statement was released in response to an e-petition filed to Downing Street by John Colbert, communications and campaigns manager, Communication Workers Union (CWU). The e-petition, signed by more than 12,000 people, said: “We the undersigned petition the prime minister to reject any part privatisation or minority stake sale of Royal Mail which could lead to loss of service, price hikes and would erode a much loved public service.”

The government response followed: “The government wants to secure the universal postal service and for Royal Mail to provide modern services to meet today’s customers’ needs. The government commissioned an independent review of the postal services market from Richard Hooper which was published in December 2008. The purpose of the review was to assess the impact on Royal Mail, other carriers and consumers, of liberalisation of the UK postal services market, to explore trends in future market development and the likely impact of these and to consider how to maintain the universal service obligation in the future.

“The Hooper report concluded that the status quo in the postal market was untenable and that if change did not occur, the universal service which is the cornerstone of the postal system would be under threat.

“The Hooper review identified a number of key areas in which the Royal Mail is inefficient. These included expansion and diversification of products and services; its network structure of mail centres and delivery offices; and its existing working practices. What is needed now is real action from Royal Mail’s management and the unions to take forward Royal Mail’s transformation plans. These plans include the introduction of new machinery to sort the mail and some 27,000 handheld tracking devices have been issued to record the delivery of Special Delivery and other tracked mail.

“The secretary of state announced on 1 July that market conditions in the European postal sector have made it impossible to conclude the process to identify a partner on terms that we can be confident would secure value for the taxpayer. This has been a priority for the government and it would be irresponsible to proceed unless we had such confidence that the taxpayer received a good deal.

“There is, therefore, no prospect in current circumstances of achieving the objectives of the legislation the government introduced to Parliament in March. However, the government firmly believes that the implementation of all of the elements of the Hooper Review recommendations is the best way to secure Royal Mail’s future and to maintain the universal postal service. When market conditions change we will return to the issue.”