The privatisation of Royal Mail is set to move a step closer if, as widely predicted, the European Commission today backs Government plans to take over the postal operator’s pension fund.
The EC launched a probe into the deal in the summer, after concerns were raised – by both politicians and rival firms – that the deal was too generous.
Industry body the DMA added its voice to the debate, warning that brand owners would ultimately foot the bill.
Reports vary to its exact value of the deal, although the historic assets and liabilities of the fund are widely estimated at up to £8bn, in addition to Royal Mail’s £1.7bn debt.
The go-ahead could be an early victory for newly appointed postal affairs minister Norman Lamb, the Liberal Democrat MP, who caused uproar within the party’s grass roots when he first promoted a policy to part-privatise Royal Mail while in opposition.
Legislation has since been passed to privatise the company, but the sell-off has been held up by losses in Royal Mail’s postal business and the need to deal with the pension deficit and put a new regulatory system in place.
However, its state-owned counterparts in other EU countries do not have a great track record when it comes to gaining Brussels’ approval. In January, it ordered Deutsche Post to repay about €1bn of illegal state aid and Bpost, the Belgian state-controlled postal group, to reimburse €417m.
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