Moves to sell Royal Mail at last stage
Privatisation of the Royal Mail moved a step closer yesterday when a Bill paving the way for its sell-off passed the final Parliamentary stage.
Business Secretary Vince Cable said approval of the Postal Service Bill was a "significant milestone" for the Royal Mail, ahead of the measure being given Royal Assent, expected by the end of the month.
He said: "Royal Mail and the Post Office are important and cherished parts of our society.
"It was vital that we took swift action to put them on a sustainable footing.
"Passing the legislation, reforming regulation, getting state aid approval, tackling the pension deficit - these are all vital steps that will provide momentum towards a sale of Royal Mail.
"They will also give the company the security and certainty it needs to press ahead with its essential modernisation programme."
During the final debate in the House of Commons yesterday, Postal Affairs Minister Edward Davey set out the next two steps - obtaining state aid approval from the European Commission and changing the regulatory regime.
The minister confirmed that the Government intends to take on Royal Mail's historic pension deficit with effect from March 2012 as part of the preparations for a sale of the company and plans to restructure the company's balance sheet.
Ministers said informal talks had started with the European Commission over approval for its planned financial support.
The Government will submit a formal state aid notification in the next few days and hopes that the process will be completed by March 2012.
Mr Davey said: "Today is unquestionably a major step forward in protecting our universal postal service and our Post Office network.
"We have worked extremely hard to ensure the best possible outcomes for the taxpayer and the dedicated employees of Royal Mail and the Post Office up and down the country.
"At least 10% of the shares in Royal Mail will go to its employees as part of the sale process.
"Royal Mail's staff will get secure pensions, and the proposed support will ensure that the company is on a sound commercial footing and can operate on a level playing field."
A Royal Mail spokesman said: "We welcome the Government's strong commitment to Royal Mail and the Universal Service Obligation. The Postal Services legislation provides a framework to deal with pressing issues like our pension deficit and the need for external capital."
The Communication Workers Union warned that the UK's postal service faces an "uncertain future" once the legislation is approved.
Of shares in the Royal Mail, when sold, will go to its employees