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10/09/2010
Royal Mail Faces Privatisation Or Sale
The Government is set to go ahead with plans to privatise or sell Royal mail, it has been announced.
Business Secretary Vince Cable made the decision following the updated recommendations from businessman Richard Hooper, who previously published a report on the maintenance of Royal Mail in December 2008.
The former Deputy Chairman of Ofcom said that the Royal Mail's financial report had worsened since the publication of the earlier report and said that it could only be maintained with private sector funding and expertise.
Mr Hooper said that access to private capital would ensure that the Royal Mail would have available cash for modernisation.
Mr Cable said: "This update reaffirms the findings of Richard Hooper's original report and the views he has given me during the course of the summer. He paints a very clear picture - Royal Mail is facing a combination of potentially lethal challenges - falling mail volumes, low investment, not enough efficiency and a dire pension position."
"We are determined to safeguard Royal Mail for the future and help it tackle these challenges. We will come forward with new legislation in the autumn. It will draw heavily on Hooper's analysis and recommendations and the government's wider objectives, including the need for employees to have a real stake in the future of the business."
However, the CWU trade union has criticised the recommendations, saying that the plan would destroy Royal Mail and lead to higher postal charges. CWU General Secretary Billy Hayes said: "Privatisation is old politics. It's the failed politics of history which brought disruption to Britain's utilities and railways and astronomical prices for consumers. Dangerously in this case, we fear the Government may also be plotting to seize the pension assets.
"Privatisation would be devasting for Royal Mail and the whole country's postal services. The universal service has been a key part of the UK post for 170 years, but because it isn't the profitable element of mail, the privatisation will put it at risk. This could damage the service for all customers including millions of small business and potentially harm the UK economy. Privatisation will also mean separation of Royal Mail and the post office network, putting the very existence of many more post offices that play such a key role in Britain's communities at risk."
(KMcA)
Business Secretary Vince Cable made the decision following the updated recommendations from businessman Richard Hooper, who previously published a report on the maintenance of Royal Mail in December 2008.
The former Deputy Chairman of Ofcom said that the Royal Mail's financial report had worsened since the publication of the earlier report and said that it could only be maintained with private sector funding and expertise.
Mr Hooper said that access to private capital would ensure that the Royal Mail would have available cash for modernisation.
Mr Cable said: "This update reaffirms the findings of Richard Hooper's original report and the views he has given me during the course of the summer. He paints a very clear picture - Royal Mail is facing a combination of potentially lethal challenges - falling mail volumes, low investment, not enough efficiency and a dire pension position."
"We are determined to safeguard Royal Mail for the future and help it tackle these challenges. We will come forward with new legislation in the autumn. It will draw heavily on Hooper's analysis and recommendations and the government's wider objectives, including the need for employees to have a real stake in the future of the business."
However, the CWU trade union has criticised the recommendations, saying that the plan would destroy Royal Mail and lead to higher postal charges. CWU General Secretary Billy Hayes said: "Privatisation is old politics. It's the failed politics of history which brought disruption to Britain's utilities and railways and astronomical prices for consumers. Dangerously in this case, we fear the Government may also be plotting to seize the pension assets.
"Privatisation would be devasting for Royal Mail and the whole country's postal services. The universal service has been a key part of the UK post for 170 years, but because it isn't the profitable element of mail, the privatisation will put it at risk. This could damage the service for all customers including millions of small business and potentially harm the UK economy. Privatisation will also mean separation of Royal Mail and the post office network, putting the very existence of many more post offices that play such a key role in Britain's communities at risk."
(KMcA)
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