Royal Mail's Future Again In Focus

The importance of the 'universal postal service' that continues to offer door-to-door deliveries in the UK is again up for discussion.

Business Secretary Vince Cable today announced that Richard Hooper will be updating his December 2008 Report on the maintenance of the service.

He will let Ministers have his initial views in the summer and will publish a fuller update by early autumn.

Vince Cable said: "Unless we take the right steps Royal Mail risks being laid low by falling mail volumes, low investment and a huge pensions' time bomb.

"We want to deal with these challenges and will be coming forward with new legislation to do just that.

"We believe that Richard Hooper's recommendations and analysis are still broadly valid today, but as our policy develops we want to be able to test it against current market conditions.

"Richard's in-depth knowledge and experience will enable us to take account of recent developments in the postal market," he said.

Richard Hooper responded: "When I published my report eighteen months ago, I concluded that the universal service was under threat and there was a consensus that the status quo was untenable.

"Developments since then have seen letter volumes continuing to decline and Royal Mail continuing to modernise its operations, helped by the recent agreement between the management and the CWU.

"I welcome the opportunity to update my report and look forward to hearing from all those whom we consulted last time and from others who have an interest," he said.

The update will consider recent developments in the postal sector and Royal Mail and test whether the underlying issues which threatened the maintenance of the universal postal service remain.

It will look at whether the original recommendations still provide the best solutions to the challenges faced by the company.

Organisations with an interest in this area will be invited to submit their views, including Royal Mail, Postcomm, Ofcom, the Communication Workers Union and Consumer Focus.

The Queen's Speech set out that a Postal Services Bill will be introduced during this session of Parliament.

The Bill will enable the modernisation of Royal Mail, in partnership with employees, and will ensure it benefits from private sector capital and disciplines

The Coalition Agreement committed that the Government will seek to ensure an injection of private capital into Royal Mail, including opportunities for employee ownership.

The Post Office will be retained in public ownership due to its hugely important social and economic role in communities throughout the UK.

(BMcC/GK)