Part privatisation of Royal Mail likely to be rejected

Calls for a radical shake up of Royal Mail are less likely to lead to job cuts as the government will not agree to part-privatise the organisation.

A report delivered to ministers last week by Richard Hooper, a former deputy chairman of Ofcom, is said to recommend selling half of the state-owned group to private business, which would result in closing 30 mail centres.

But Business secretary Peter Mandelson is said to have ruled out any plans privatisation this morning, although a full report confirming the government’s decision is due at 3:30pm today.

Ministers will discuss plans for a complete overhaul of Royal Mail to maintain a “universal service” and letter deliveries across the country six days a week.

Royal Mail is struggling to keep pace with competitors in a declining market and the review in the spring will include consideration of how to tackle its pension deficit of £7bn.

Unions have already warned that part-privatisation would lead to nearly one third of the Royal Mail 170,000 workforce losing their jobs.

Billy Hayes, general secretary of the Communications and Workers Union (CWU), said: “When the banks are being nationalised and everybody is seeing the failure of the private markets, why would the introduction of private capital be the answer to the future of the British postal service”.

The move to reform Royal Mail comes as about 2,000 workers are due to stage a 24-hour strike this Friday, the day before the last posting day to get mail delivered by Christmas.

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