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Government supports mail sell-off Government backs sell-off of mail
(9 minutes later)
The government has said it accepts a report's recommendation that the Royal Mail should be part-privatised.The government has said it accepts a report's recommendation that the Royal Mail should be part-privatised.
The study by Richard Hooper says new minority owners can offer the "confidence, experience and capital" needed to carry out vital changes.The study by Richard Hooper says new minority owners can offer the "confidence, experience and capital" needed to carry out vital changes.
Describing the current Royal Mail as "untenable", the report adds that the universal service is under threat without modernisation.Describing the current Royal Mail as "untenable", the report adds that the universal service is under threat without modernisation.
Dutch firm TNT said it would be interested in a stake in Royal Mail.Dutch firm TNT said it would be interested in a stake in Royal Mail.
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.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.
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.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.
'Volatile' pension deficit'Volatile' pension deficit
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.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.
I believe that Royal Mail and the postal market can thrive in the future - provided that decisive action is taken now Lord Mandelson Read the report in full Most computers will open PDF documents automatically, but you may need to download Adobe Acrobat Reader. Download the reader here
The study said that the Royal Mail needed to modernise urgently, and introduce more automation.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".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.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 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).The study by Mr Hooper was commissioned by the Department of Business, Enterprise and Regulatory Reform (BERR).
Lord Mandelson said it was vital the suggested changes took place.
"I believe that Royal Mail and the postal market can thrive in the future - provided that decisive action is taken now," he told the Lords.
"Without far-reaching change, the opportunities brought by technology will become overwhelming threats."
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.