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| Version 1 | Version 2 |
|---|---|
| Call for sell-off of Royal Mail | |
| (about 1 hour later) | |
| 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. |
| The Royal Mail still controls 90% of the postal market | |
| He said the government would find it hard to dismiss Postcomm's suggestion out of hand - although the prime minister was likely to be irked that such a divisive issue was being forced back on to his agenda. | |
| A spokesman for the Department for Business, Enterprise and Regulatory Reform said the review was independent of the government. | |
| "It is not for the department to comment on points made in submissions to the panel at this stage, or second-guess the panel's views," he said. | |
| The Communication Workers Union, the main postal workers' union, said Postcomm's proposal overstepped its remit. | |
| "If this was endorsed by the government it would be a political football," a spokesperson said. | |
| Competition needed | |
| 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. |
| It also proposed that Post Offices Ltd, which controls the post office network, should be separated from Royal Mail and kept wholly in public ownership. | |
| It already receives a substantial subsidy and is viewed as a de facto social service. | |
| Threat | |
| Earlier this month, the independent review of the postal sector found in an initial report that liberalisation had produced "no significant benefits" for either households or small businesses. | |
| The independent panel warned that the "substantial threat" to the Royal Mail's financial security threatened the universal service. | |
| While the report said homes and small firms had not gained from the increased competition, it said large companies had "seen clear benefits from liberalisation - choice, lower prices and more assurance about the quality of the mail service". | |
| It will submit its final report this summer. |