Call for Royal Mail shake-up

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http://www.google.com/hostednews/ukpres ... TqMCuY1Rfw

Calls for a radical shake-up of the Royal Mail are expected, possibly including plans for a part sale to a foreign company.

An independent study by Richard Hopper, a former deputy chairman of media watchdog Ofcom, is expected to call for a major overhaul of the firm which faces a multi-billion pound pension deficit.

It is also expected to recommend rapid modernisation to maintain a "universal service" and letter deliveries across the country six days a week.

A warning will be made about the Royal Mail's pensions deficit, which was £3.4 billion in 2006 but is likely to have doubled when a new valuation is made next year. The Daily Telegraph reported that a large stake in Royal Mail is to be sold to a foreign postal company under plans drawn up by ministers, said to be worth around £3 billion.

At least a third of the state-owned firm will be sold to a private company, with TNT - the express delivery service part of the Dutch company TPG, the former state postal service - and DHL, the parcel courier, part of Germany's Deutsche Post, vying to buy a stake, according to the report.

There was no official reaction to the report, apart from a re-iteration from a source close to Business Secretary Lord Mandelson, who said: "Our concern is to save the Royal Mail and secure its future, not privatise it. We have a manifesto commitment to a publicly-owned Royal Mail and we will not be setting that aside."

Lord Mandelson is expected to publish the Hooper report on Tuesday and give the Government's initial response in a speech to the House of Lords.

Shadow business secretary Alan Duncan said ministers were planning to assume responsibility for the Post Office pension liabilities, putting the country "further into debt" and leaving future generations to foot the bill.

He said: "People will be appalled that the Government is resorted to raiding pension funds in order to plug the black hole in the public finances. I fear the Government is going to raid £22 billion of pension assets, dump the liability as a mortgage on future generations and dress it up as the salvation of the Royal Mail.

"Not only will this plan pile debt on to debt for families and businesses, but it will completely remove the Royal Mail's commercial incentive to modernise and reduce its deficit. This is a dangerous plan that must be resisted."