Disc loss firm 'to save UK mail'
Dec 17 2008 by William Green, The Journal
AN overseas company caught up in the loss of 25 million personal records from a North East tax office could take a stake in the Royal Mail. Dutch postal group TNT expressed an interest in exploring a “strategic partnership” with Royal Mail after ministers indicated support for a partner company to bring fresh investment to the business.
But the news sparked controversy because TNT was caught up in the disappearance of personal records on computer discs from an HM Revenue & Customs office in Washington on Wearside last year.
The password-protected details were lost after two discs were sent by a junior official to the National Audit Office via delivery firm TNT on October 18, but never arrived.
The developments came after the Government backed a review of the Royal Mail that backed bringing in a minority partner to secure its future and tackle a multi-billion-pound pension deficit.
Communication Workers Union general secretary Billy Hayes said: “It is incredible that the British Government, which has led the world in overhauling banks, needs another European postal service to rescue the Royal Mail, especially one which has already been disgraced by losing sensitive data discs in the mail.”
Blyth Valley MP Ronnie Campbell said: “Let’s hope they have learnt by their mistakes, but I don’t agree with a part-privatisation of the Royal Mail. Eventually, I think they will do the whole lot and go out to private hands.”
Business Secretary Lord Mandelson insisted a minority stake partner would boost the Royal Mail. He said: “It will bring the Royal Mail fresh investment, new opportunities to grow in Europe and internationally, and to offer new services. It will provide a fresh new impetus to modernising the Royal Mail and securing the universal service.”
He also said he would welcome other expressions of interest from other “credible partners”, but stressed any partnership would not involve the network of local post offices.
The review by Richard Hooper, a former deputy chairman of media watchdog Ofcom, was “absolutely clear” the main challenge to the Royal Mail was technology changes and consumer choices, resulting in £500m lost profits last year, Lord Mandelson said.
The report also said the Royal Mail was less efficient than its European counterparts, where 85% of mail was put in walk-order by machine for delivery to the individual home or business, whereas it was done by hand in local UK delivery offices.
Lord Mandelson said the pension deficit was “near impossible” for the business. “Each year, on top of its regular £500m contribution to the pension fund, the company is having to find an extra top-up of £280m to plug the deficit. These payments look set to rise substantially when the fund is revalued next year.”
The report recommended the Government should take responsibility for reducing the pension deficit substantially as part of the changes.
TNT chief executive Peter Bakker said: “Assuming the UK Government implements these recommendations, I think that exploring a strategic partnership with Royal Mail makes a lot of sense for both our companies.
“The objective of the partnership would be to help develop Royal Mail into a modern, best-in-class postal operator that combines excellent mail service with solid and sustainable financial performance as part of a broader global network.”
