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| Version 1 | Version 2 |
|---|---|
| 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. | 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. | The CWU trade union said the plan would devastate the postal service and lead to higher postal charges. |
| 'Failed politics' | '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. | 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. | "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. |
| Royal Mail welcomed the report. | |
| "Royal Mail needs a way of getting access to capital, a resolution of the legacy pension deficit and a strikingly different regulatory approach which allows us to compete fairly in an increasingly tough and shrinking market," said a spokesman. | |
| But the CWU's general secretary, Billy Hayes, said privatisation would lead to higher prices for customers and job losses for staff. | 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." |
| Pension problem | |
| Mr Hooper's report argues that only the private sector can provide the money necessary to continue the modernisation of the postal service at a time when the government is strapped for cash. | |
| A key feature of the latest recommendations, like those first published in December 2008, is 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 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. | "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." | "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 | Staff shares |
| Last year, the Labour government abandoned its plans, inspired by Mr Hooper's first report, to find a private sector partner for the Royal Mail via a partial sale. | |
| Mr Hooper said that in 18 months since that report, the Royal Mail's position had become worse. | |
| The decline in the number of letters being sent has accelerated and will not be offset by more parcels being sent, for instance, to internet shoppers, he argued. | |
| He demanded "urgent action" to preserve the universal service under which letters are delivered for the same charge regardless of their destination in the UK, six days a week. | |
| A new feature of his 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. | "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. |
| "Employee shares could be a powerful force in supporting the company's modernisation and future success." | |
| The government said that the Post Office network would not be included in its forthcoming privatisation plans. | |
| Mr Hooper is a former deputy chairman of the telecoms regulator Ofcom. |