Brussels clears aid to Royal Mail

Government support for Royal Mail, totalling £2.65bn, was approved on 8 April by Brussels under European Union state aid rules after a two-year probe triggered by complaints from rivals.

Government support for Royal Mail, totalling £2.65bn, was approved on 8 April by Brussels under European Union state aid rules after a two-year probe triggered by complaints from rivals.

The European Commission said that three loan measures, totalling £1.7bn and granted in 2001, 2003 and 2007, had been given on commercial terms. Accordingly, it found that these were free of state aid.

Officials said that separate support, worth £850m, for Royal Mail’s pension fund did amount to state aid but that “in view of the size of the historic pensions liabilities . . . some of which were built up when the business had a letters monopoly”, this was legal under the rules.

Brussels stressed the approval given did not cover the new measures announced in December in the wake of the Hooper report.

These centre on proposed part-privatisation of the delivery service and are currently the subject of separate discussion between the commission and the UK authorities.