Postal unions have reacted angrily after the Government today confirmed plans to go ahead with the privatisation or sale of Royal Mail.
Business Secretary Vince Cable made the commitment after receiving updated recommendations from Richard Hooper, whose report in 2008 led the Labour Government to consider privatisation – before scrapping plans due to pressure from backbenchers.
Hooper’s latest report says the universal postal service can be maintained only by an injection of private sector money and expertise.
Its key recommendations are: a less burdensome regulatory framework with responsibility for regulation moving from Postcom to Ofcom; the pension deficit should be taken over by the Government as part of the wider range of measures; and private sector capital must be introduced into Royal Mail. A new feature of Hooper’s proposals is that staff should be given a stake in the company if it is sold or privatised.
Hooper said: “If all the recommendations in my updated report are implemented without further delay, and Royal Mail modernises to ‘best in class’ with management, workforce and unions working together, then despite the very real market difficulties the company has a healthy future.”
But the Communication Workers’ Union (CWU) insisted that privatisation was unpopular with the public and a politically motivated move.
Billy Hayes, CWU general secretary, said: “Closures, cuts and profit will rule while customers, small businesses, communities and taxpayers lose out. This report is politically motivated to please the ideology of the coalition. People who work in the industry know that privatisation has no positive role in this public service.”
Dave Ward, CWU deputy general secretary, said the union was concerned that the pensions of its members will be at risk under privatisation.
“Everyone hears about the deficit, but there’s over £26 billion in assets which belongs to the postmen and women who have paid their contributions every week of their working lives,” he said. “We will never let the Government get its hands on that money for anything other than what it’s intended – to pay for the retirement of hard-working postal workers.”
Postal workers have invested in the modernisation of the service by supporting the business transformation agreement signed earlier this year, Ward added.
“The company and its employees are working hard to transform the business together,” he said. “Rather than reverse the progress, the Government needs to show the same support for this key public service.”
But Cable said legislation due in the autumn would “draw heavily” on Hooper’s recommendations and the Government’s wider objectives, including the need for employees to have a stake in the future of the business.