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| Royal Mail to be privatised or sold, government says | Royal Mail to be privatised or sold, government says |
| (40 minutes later) | |
| The government is to go ahead with the privatisation or sale of Royal Mail. | |
| Business Secretary Vince Cable made the commitment after receiving updated recommendations from the businessman Richard Hooper. | Business Secretary Vince Cable made the commitment after receiving updated recommendations from the businessman Richard Hooper. |
| His latest report says the universal postal service can only be maintained by an injection of private sector money and expertise. | His latest report says the universal postal service can only be maintained by an injection of private sector money and expertise. |
| The CWU trade union said the plan would devastate the postal service and lead to higher postal charges. | |
| 'Failed politics' | |
| Mr Cable said: "Royal Mail is facing a combination of potentially lethal challenges - falling mail volumes, low investment, not enough efficiency and a dire pension position. | |
| "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," he added. | |
| But the CWU's general secretary, Billy Hayes, said privatisation would lead to higher prices for customers and job losses for staff. | |
| "It's the failed politics of history which brought disruption to Britain's utilities and railways and astronomical prices for consumers," he said. | "It's the failed politics of history which brought disruption to Britain's utilities and railways and astronomical prices for consumers," he said. |
| "Dangerously in this case, we fear the government may also be plotting to seize the pension assets." | "Dangerously in this case, we fear the government may also be plotting to seize the pension assets." |
| A key feature of Hooper's report, like his first one published in December 2008, is a proposal that the Royal Mail's pension scheme, which currently has a deficit of £8bn, should be taken over by the government to relieve the company of making huge extra contributions. | |
| The pension problem is mentioned more than 40 times in Mr Hooper's latest 50-page report. | |
| "The introduction of private sector capital is by itself far from sufficient to secure the future of the universal postal service," Mr Hooper said. | |
| "Its future depends just as much on resolving the closely connected issues of the pension deficit and the need to transform postal regulation." | |
| Staff shares | |
| A new feature of Mr Hooper's proposals, supported by the coalition government, is that staff should be given a stake in the company if it is sold or privatised. | |
| "It is important that any future employee ownership scheme should be taken forward with the aim of achieving the culture change that is needed within Royal Mail," he said. | |
| "If it does drive culture change, employee shares could be a powerful force in supporting the company's modernisation and future success." |