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Mail report 'to suggest sell-off' Government supports mail sell-off
(about 5 hours later)
A report into the future of the Royal Mail due out later is expected to call for the service to be part-privatised. The government has said it accepts a report's recommendation that the Royal Mail should be part-privatised.
The study by former media watchdog boss Richard Hooper was commissioned by the Department of Business, Enterprise and Regulatory Reform (BERR). The study by Richard Hooper says new minority owners can offer the "confidence, experience and capital" needed to carry out vital changes.
A BERR spokeswoman has declined to comment on whether it would back any partial sell-off recommendation. Describing the current Royal Mail as "untenable", the report adds that the universal service is under threat without modernisation.
The spokeswoman said no comment would be made by the department until the report was released. Dutch firm TNT said it would be interested in a stake in Royal Mail.
The study by Mr Hooper, a former deputy chairman of Ofcom, is also expected to show a big rise in the Royal Mail's pension fund deficit. The report's findings were presented by Business Secretary Lord Mandelson, who confirmed that the government agreed with its recommendation that the service be part-privatised.
This may now total as much as £7bn. Lord Mandelson added that the government also agreed with its second recommendation that the government take over responsibility for reducing the mail service's pensions deficit.
Strike action 'Volatile' pension deficit
The report is further expected to recommend modernisation for the service, with potential job losses as a result. Mr Hooper, a former deputy chairman of media watchdog Ofcom, found that as a result of new communication technologies such as e-mail, the Royal Mail had missed out on a potential £500m of profits over the past year.
The government has committed itself to maintaining the "universal service" - daily deliveries to every UK home, and collections from all postboxes. The study said that the Royal Mail needed to modernise urgently, and introduce more automation.
Regarding the Royal Mail's pension deficit, the report estimated it at £280m, describing it as "large, growing and volatile".
It recommended that the government should take over responsibility for this, but that this should only come as part of a wider reform of the service.
The report added that labour relations needed to improve, that levels of trust and cooperation between managers and workers was low, and that industrial action took place too often.
The study by Mr Hooper was commissioned by the Department of Business, Enterprise and Regulatory Reform (BERR).
Meanwhile, up to 2,000 postal workers are to stage a 24-hour strike later this week in a row over office closures.Meanwhile, up to 2,000 postal workers are to stage a 24-hour strike later this week in a row over office closures.
The Communication Workers Union said its members in Liverpool, Coventry, Stockport, Oxford, Crewe and Bolton would walk out on 19 December - the day before the last Christmas posting day for first-class letters.The Communication Workers Union said its members in Liverpool, Coventry, Stockport, Oxford, Crewe and Bolton would walk out on 19 December - the day before the last Christmas posting day for first-class letters.