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Call for part-private Royal Mail | Call for part-private Royal Mail |
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The postal regulator has called for Royal Mail to be partly privatised to safeguard the quality of the UK's mail delivery service. | The postal regulator has called for Royal Mail to be partly privatised to safeguard the quality of the UK's mail delivery service. |
Postcomm warned that Royal Mail's financial difficulties would worsen unless bold action was taken. | Postcomm warned that Royal Mail's financial difficulties would worsen unless bold action was taken. |
Nigel Stapleton, Postcomm's chairman, told the BBC that without private sector involvement, Royal Mail may require a government subsidy. | Nigel Stapleton, Postcomm's chairman, told the BBC that without private sector involvement, Royal Mail may require a government subsidy. |
Private sector partnerships had worked in other European countries, it said. | Private sector partnerships had worked in other European countries, it said. |
Postcomm is making the proposal to an independent review on the future of postal services that has been set up by the government. | Postcomm is making the proposal to an independent review on the future of postal services that has been set up by the government. |
"Postcomm wants to see the government and Royal Mail embrace a partnership approach with the private sector to secure a universal service," Mr Stapleton said. | "Postcomm wants to see the government and Royal Mail embrace a partnership approach with the private sector to secure a universal service," Mr Stapleton said. |
The prime minister is likely to be irked that such a divisive issue is being forced back on to his agenda Robert Peston, BBC business editor Read Robert's thoughts in full | The prime minister is likely to be irked that such a divisive issue is being forced back on to his agenda Robert Peston, BBC business editor Read Robert's thoughts in full |
Royal Mail's 350-year monopoly ended at the start of 2006, when other licensed operators were given the right to collect and deliver mail. | Royal Mail's 350-year monopoly ended at the start of 2006, when other licensed operators were given the right to collect and deliver mail. |
However, it is still obliged to deliver letters to and from anywhere in the UK at a uniform tariff. | However, it is still obliged to deliver letters to and from anywhere in the UK at a uniform tariff. |
It made a loss of £279m in the year to the end of March. | It made a loss of £279m in the year to the end of March. |
The core problem for Royal Mail is that it has lost business in the lucrative bulk mail collection and sorting market, but still must uphold less profitable universal delivery. | The core problem for Royal Mail is that it has lost business in the lucrative bulk mail collection and sorting market, but still must uphold less profitable universal delivery. |
Contentious | Contentious |
The BBC's business editor Robert Peston said the proposal was highly contentious and could lead to Royal Mail being partly owned by a private equity firm. | The BBC's business editor Robert Peston said the proposal was highly contentious and could lead to Royal Mail being partly owned by a private equity firm. |
Privatisation in any form would likely be opposed by the Communication Workers Union, the main postal workers' union, he said. | Privatisation in any form would likely be opposed by the Communication Workers Union, the main postal workers' union, he said. |
"The prime minister is likely to be irked that such a divisive issue is being forced back on to his agenda," he said. | "The prime minister is likely to be irked that such a divisive issue is being forced back on to his agenda," he said. |
Postcomm said more competition was needed to ensure that a high-quality service was maintained. | Postcomm said more competition was needed to ensure that a high-quality service was maintained. |
To encourage new operators, it urged that Royal Mail's exemption from VAT should be scrapped. | To encourage new operators, it urged that Royal Mail's exemption from VAT should be scrapped. |
"Royal Mail needs access to private capital and a stronger set of incentives to enable it to restructure and become more profitable," Postcomm said. | "Royal Mail needs access to private capital and a stronger set of incentives to enable it to restructure and become more profitable," Postcomm said. |
A CWU spokesperson said that Postcomm's proposal overstepped its remit. | |
"If this was endorsed by the government it would be a political football," the spokesperson said. |