RM boss claims privatisation is the only way it can thrive

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Royal Mail boss claims privatisation is the only way service can thrive

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The Communication Workers’ Union is stepping up pressure by sending ballot papers to thousands of members from tomorrow

THE boss of the Royal Mail claims ­privatising the postal giant is the only way it can thrive.

Moya Greene said a sell-off was vital to attract investment. She told the Daily Mirror: “If we do not grow, it will be easy for us to fall back.”

But union leaders slammed the controversial plans, arguing Royal Mail was doing well under state ownership and that privatisation would lead to higher prices and a worse service.

The Communication Workers’ Union is stepping up pressure by sending ballot papers to thousands of members from tomorrow for a possible boycott.

The move, which would see staff refusing to handle items from rival operators, could cause widespread chaos.

Royal Mail paved the way for a possible £3billion stock market flotation by posting a big jump in profits from £152million to £440m. Its core UK parcels and letters unit saw profits soar from £33m to £294m.

On privatisation, Greene said: “It is the right time because we desperately need access to capital. One of the things that holds us back is that we don’t have it.”

The Canadian said the business was “technically insolvent” when she took over as chief executive nearly three years ago, adding: “The universal service was hanging by a thread and we had a failed regulatory model.”

A 13% increase in Royal Mail’s parcels business – it handled nearly 1.1billion packages last year – was fuelled by a boom in internet shopping.

And while letters generated just under £4.8bn in revenue and grew 3%, the increase came from delivering other operators’ post and marketing – or junk – mail.

The number of stamped letters handled tumbled by 8% to around 58million a day.

The CWU’s threatened boycott could delay deliveries of mail, such as bank statements, bills and birthday cards.

Greene said: “I agree with the union on most things but this is a philosophical view that there should be continued government ownership.”

Dave Ward, CWU deputy general secretary, said: “Improved productivity and modernisation has played a role in these good results.

“Privatisation isn’t necessary and it would destabilise the workforce and the good progress being made.”

Greene said that she backed plans to give 10% of shares from a sell-off of the business to its thousands of workers.