News
Government reveals Royal Mail privatisation plans
Published on 20th May 2010 by Melanie Parkes
The government faces a likely battle with postal unions after revealing plans to part-privatise the Royal Mail.
The new Conservative-Liberal Democrat leadership, in its formal coalition document today, has pledged to "inject private capital" into the postal service, despite likely opposition from the Communications Workers Union (CWU). Business secretary Vince Cable is the key figure in drawing up the plans, which will be fleshed out with more detail in the coming months.
It is not yet known what proportion of Royal Mail will pass into private hands. The Conservative manifesto had already committed the Tories to a full privatisation, while the Liberal Democrats had favoured a 49 per cent sale with the remainder of shares being held between an employee trust and the government. The coalition is expected to adopt elements of both plans, with an employee trust playing a role. However, the document revealed that the Post Office branch network will remain public-owned.
Restructuring Royal Mail proved a persistent stumbling block for the previous Labour administration, with a backbench revolt last year stifling privatisation plans masterminded by Lord Mandelson. Management efforts to modernise working practices led to an acrimonious dispute with the CWU last autumn, which was only settled in March when a three-year, 6.9 per cent pay deal was signed.
One concern in any privatisation will be Royal Mail's pension deficit, which is expected to reach around £10 billion when it is revalued next month.
It is not yet known what proportion of Royal Mail will pass into private hands. The Conservative manifesto had already committed the Tories to a full privatisation, while the Liberal Democrats had favoured a 49 per cent sale with the remainder of shares being held between an employee trust and the government. The coalition is expected to adopt elements of both plans, with an employee trust playing a role. However, the document revealed that the Post Office branch network will remain public-owned.
Restructuring Royal Mail proved a persistent stumbling block for the previous Labour administration, with a backbench revolt last year stifling privatisation plans masterminded by Lord Mandelson. Management efforts to modernise working practices led to an acrimonious dispute with the CWU last autumn, which was only settled in March when a three-year, 6.9 per cent pay deal was signed.
One concern in any privatisation will be Royal Mail's pension deficit, which is expected to reach around £10 billion when it is revalued next month.