Year: 2005

Royal Mail executives are pressing the Government to appoint a senior business figure to head the review into the future of the business. They fear an inquiry led by ministers or civil servants will reduce the prospect of radical changes.
An announcement about the terms of reference and the inquiry team has been delayed by Whitehall in-fighting but Alan Johnson, Trade and Industry Secretary, is anxious to release details before the Commons rises for the summer recess on Thursday. Royal Mail has lost the battle over privatisation although it remains hopeful of persuading ministers to back a “halfway house” solution based on setting aside 20pc of the equity for employees.

One of the Tory leadership contenders has backed the Royal Mail’s proposals to give its employees a stake in the group’s ownership. The move by Tim Yeo, breaking ranks with official Conservative policy, comes days before a government-commissioned review into the state-owned postal operator’s future.
Gordon Brown, chancellor, and Alan Johnson, trade and industry secretary, are still finalising the terms of reference for the review, which will consider the Royal Mail’s future once the postal services market is opened fully to competition on January 1. The debate between the chancellor, Downing Street and the Department of Trade and Industry concerns the freedom that should be given to the senior business figure who will head the review to recommend ownership changes.

The government is set to rule out the privatisation of Royal Mail when it announces the terms of reference for a review of the postal business, the Sunday Telegraph reported. ‘He will make it clear that we are not privatising,’ a colleague of trade and industry secretary Alan Johnson reportedly told the paper. Royal Mail’s board continues to hope for permission for the transfer of 20 pct of the business into the hands of its employees – and possibly up to 49 pct, the paper added.