British government to pursue Royal Mail privatisation
The British government said Friday it would press ahead with plans to privatise or sell off Royal Mail after a report warned that "urgent action" was needed to protect the service.
Business Secretary Vince Cable accepted the conclusions of an updated version of a study originally ordered by the previous government.
The new study by businessman Richard Hooper said Royal Mail's financial position had worsened since his earlier report and the service could only be maintained with the injection of private sector finance and expertise.
The Communication Workers Union, which has warned of potential strike action to fight privatisation, said it "condemned" the government announcement.
General secretary Billy Hayes said: "Privatisation is old politics. It's the failed politics of history which brought disruption to Britain's utilities and railways and astronomical prices for consumers.
"Dangerously in this case, we fear the government may also be plotting to seize the pension assets."
A key feature of the latest recommendations is that Royal Mail's pension scheme -- which has grown from eight billion pounds to more than 10 billion pounds over the past 18 months -- should be taken over by the government.
Cable said: "Royal Mail is facing a combination of potentially lethal challenges -- falling mail volumes, low investment, not enough efficiency and a dire pension position.
"We will come forward with new legislation in the autumn. It will draw heavily on Hooper's analysis and recommendations and the government's wider objectives."
The Royal Mail has seen its business squeezed as Britons increasingly use email instead of sending letters.
© 2010 AFP