Semi-private Royal Mail?
The Postal Regulator is calling for Royal Mail to be partly privatised.
Postcomm is making the highly contentious proposal – which could lead to Royal Mail being owned in part by a private-equity firm – to an independent review on the future of postal services that has been set up by the government.
It says that Royal Mail’s financial difficulties are likely to worsen considerably, without the injection of private-sector capital and management expertise into the state-owned business.
Nigel Stapleton, the chairman of Postcomm, has warned in an interivew with me that in the absence of part-privatisation the government may be required to inject a big new subsidy into Royal Mail, which it won’t wish to do.
The risk of not bringing in the private sector or a subsidy would be a significant deterioration in the quality of Royal Mail’s service under its obligation to deliver letters to and from anywhere in the UK at a uniform tariff, he said.
Only last week Royal Mail announced that it had made a loss on providing this so-called universal service for the first time. Royal Mail estimated that the loss for the last financial year on this its core activity was GBP 100m.
The government will find it hard to dismiss the suggestion out of hand, especially since analysts believe the independent review led by Richard Hooper is expected to come to the same conclusion.
However the Prime Minister is likely to be irked that such a divisive issue is being forced back on to his agenda.
Privatisation in any form, whole or part, is strongly opposed by the CWU, the main postal workers’ union – which is also a leading funder of the Labour Party.
The CWU’s opposition is shared by many Labour MPs.
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