Britain publishes post service sell-off plans
The British government published its plans to privatise the Royal Mail on Wednesday, with companies allowed to buy up to 90 percent of the state-owned postal service.
Business Secretary Vince Cable said foreign firms would be allowed to buy the Royal Mail. Postal workers will get 10 percent of the shares.
"Royal Mail is in a difficult position," Cable said.
"There is no hiding the facts: mail volumes falling, a multi-billion-pound pension deficit, less efficiency than its competitors and an urgent need for more capital at a time when there are huge constraints on the public purse.
"The company now has to go further and faster to innovate, modernise and adapt better to the digital age."
He said the employee share scheme would be the largest privatisation of its kind in Britain -- bigger than British Telecom, British Gas or British Airways.
The government will take on the Royal Mail's pension fund, including its hefty deficit.
While the Royal Mail employs postal staff and collects and delivers letters, the Post Office runs the branch network.
Cable also revealed plans for the Post Office, saying the government was considering converting it into a mutual structure.
The government is now on a collision course with the Communication Workers Union.
"The government has wasted no time in flogging off the country's state assets without exploring other options," general secretary Billy Hayes said.
"Handing postal services over to the City spivs and gamblers that Vince Cable recently denounced, but is now feeding, will be bad news for everyone.
"Royal Mail can remain profitable in the public sector under an alternative model.
"The government is taking on public opinion at its peril."
In a speech to his Liberal Democrat party's conference last month, Cable accused "spivs and gamblers" in the City of London financial district of harming the British economy.
© 2010 AFP