UK Postal Services Bill: Royal Mail privatisation go-ahead
Up to 90% of Royal Mail will be privatised, the UK government has confirmed today (Wednesday). Business secretary Vince Cable stressed the need for ‘urgent’ private investment, as the Postal Services Bill was published by the government.
The Bill states that 10% of Royal Mail’s shares would go to its employees, and there would be no upper limit to private investment on the remaining shares.
Royal Mail will also be relieved of its “enormous” historic pension deficit by the Government, it was announced.
Under the proposals existing regulator, Postcomm, will be replaced by Ofcom, the communications regulator, with the Bill accounting for staff transfers.
The government believes that Royal Mail’s privatisation would “end the dependence on funding from the taxpayer and bringing new commercial disciplines into the business”.
The Postal Services Bill will be scrutinised and debated by the House of Commons in the coming months, before being considered by the House of Lords.
Cable said: “Royal Mail is in a difficult position – there is no hiding from the facts: mail volumes falling; a multi billion pound pension deficit; less efficiency than its competitors and an urgent need for more capital at a time when there are huge constraints on the public purse.
The Postal Services Bill relies heavily on the analysis and recommendations provided by Richard Hooper throughout his latest postal services report, published last month.
The business secretary said that Royal Mail has to go “further and faster to innovate, modernise and adapt better to the digital age”, a transformation that would require substantial investment.
“This investment needs to be delivered by the private sector, particularly in light of the huge public sector deficit,” he added.
“This is an important package. It will secure the services that consumers and businesses rely on. It will give employees a stable company to work for, shares in the future of the business and the secure pension they deserve. It will remove the risk to taxpayers of an expensive bail out.
Controversial plans to privatise Royal Mail were originally floated by the previous Labour Government last year, but former business secretary Lord Mandelson put the move on hold due to the turbulent economic climate.
Furthermore, the Postal Services Bill also proposes that Post Office Ltd is turned into a mutual, giving power to staff, sub postmasters and communities.
