The British government today announced changes to its privatisation plans for Royal Mail with moreprotection for the universal service but left the core aim of selling off the company untouched.
The Conservative-Liberal Democrat coalition unveiled a series of amendments to the PostalServices Bill, which has been approved by the House of Commons and is currently being considered bythe House of Lords. The changes incorporate feedback from MPs, Lords, Royal Mail, other postaloperators and the Communication Workers Union, as well as other interested parties, it confirmed.
The key elements of the bill are to sell a stake of up to 90 per cent in Royal Mail to aprivate investor to generate urgently-needed fresh capital, separation of the retail network PostOffice Ltd, with 11,500 branches, into a mutually-owned organisation, transfer of the heavypensions deficit to the government and ‘lighter’ regulation by communications regulator Ofcom,which will absorb Postcomm next year.
Among several amendments, Royal Mail will remain the sole provider of the universal servicefor at least the next ten years. The future regulator, Ofcom, will gain new powers to monitor anypotential threats to the universal service arising from end-to-end competition and will be requiredto take account of the universal service provider’s need to earn a reasonable commercial rate ofreturn from providing the service.
These changes will give further clarity to the regulatory regime and enable the regulator tostrike the right balance between competition and safeguarding the universal service of six days aweek deliveries, the British government stressed.
Other changes will ensure that the government reports more information to Parliament,including details of the ongoing commercial relationship between Royal Mail and the Post Office,and that Parliament has the opportunity to scrutinise and vote on proposals for the mutualisationof Post Office Ltd in the future.
Minister for Postal Affairs, Edward Davey, said: “Royal Mail is facing some huge challenges –falling mail volumes, a vast pension deficit, less efficiency than its competitors and an urgentneed for more capital. The number one reason we are taking action is to ensure that the universalpostal service is protected in the face of these challenges and that Royal Mail can keep deliveringand collecting letters 6 days a week at an affordable, one-price-goes-anywhere tariff.
“Politicians, Royal Mail, other postal operators and the Communication Workers Union are alsodetermined to safeguard the universal postal service. We have listened to their suggestions andmade a series of changes that will further strengthen the legislation. These important amendmentswill give extra regulatory certainty to Royal Mail and increase transparency by putting even morereporting requirements on the Government.”
In response, the Communication Workers Union welcomed the amendments which it said “go someway” towards its aim of protecting the universal service obligation (USO) and the future of postoffices. The union has regularly lobbied MPs and Lords on these issues over the last few months.
Billy Hayes, CWU general secretary, said: “We warmly welcome these amendments from theMinister to the Postal Services Bill. We have been campaigning hard to safeguard the UK’s universalpostal service and to secure both mail services and the post office network. We are pleased thatthe government has taken on board some of our concerns and we will continue to campaign and havedialogue with government to strengthen the Bill in other areas including more necessary work onregulations. The amendments on the universal service and the commercial relationship between RoyalMail and the Post Office have been key campaign aims for the union and we are delighted theGovernment has listened. We are looking for a clearer commitment to an inter-business agreementbetween Royal Mail and the Post Office, but this is a good step towards that aim.”
Dave Ward, CWU deputy general secretary (postal), added: “The union recognises theseamendments as welcome and important developments. They have been achieved as a direct result of ourcampaign and ongoing dialogue with the Government. However, we also acknowledge that on regulation,there remains a lot of work to do in order to achieve a genuinely level playing field.”
