LONDON (Reuters) – The British government set out plans to fully privatise postal delivery company Royal Mail, saying yesterday it was essential to attract private capital to ensure the service’s survival.
The commitment, which risks a confrontation with unions opposed to a selloff, follows an updated independent review of the sector by former regulator Richard Hooper, who said Royal Mail should be sold to a trade investor or floated off.
Hooper noted a cash-strapped government could find it hard to provide the necessary investment.
“He (Hooper) paints a very clear picture,” Business Secretary Vince Cable said in a statement. “Royal Mail is facing a combination of potentially lethal challenges — falling mail volumes, low investment, not enough efficiency and a dire pension position.”
Cable later set out details of the plan.
“We’re not proposing to keep a government stake,” Cable told the BBC, saying workers would be given a chance to buy shares in the privatised company. He hoped the legislation would be approved by parliament over the winter.
The Conservative-Liberal Democrat alliance which took office in May included a sell-off as part of its coalition agreement but had not specified how much of Royal Mail it would sell. The network of post offices offering retail services would remain in government hands.
