CWU vows to bury Royal Mail sell-off

Mr Cable made the commitment after receiving updated recommendations from businessman Richard Hooper.

Mr Hooper's government-commissioned report - an updated version of his original study ordered by the Labour government - claimed that "urgent action" was needed to protect the service.

Mr Hooper claims the universal postal service can only be maintained by an injection of private-sector money and expertise.

Key recommendations include:
A "new less burdensome regulatory framework with responsibility for regulation moving from Postcomm to Ofcom."
The pension deficit to be taken over by the government.
Private-sector capital to be introduced into Royal Mail in the form of sale to "a partner/trade investor or offering shares."

But postal union CWU, which was heavily involved in defeating former Labour business secretary Lord Mandelson's privatisation plans, vowed to fight the "politically motivated move by all means."

General secretary Billy Hayes said: "The universal service has been a key part of the UK post for 170 years but because it isn't the profitable element of mail, the privatisation will put it at risk.

"This could damage the service for all customers including millions of small businesses and potentially harm the UK economy.

"Privatisation will also mean separation of Royal Mail and the post office network, putting the very existence of many more post offices that play such a key role in Britain's communities at risk.

"Closures, cuts and profit will rule while customers, small businesses, communities and taxpayers lose out. This report is politically motivated to please the ideology of the coalition."

A key feature of the report, the proposal that Royal Mail's pension scheme should be taken over by the government to relieve the company of making extra contributions, was condemned by CWU deputy general secretary Dave Ward who feared the pensions of members would be put at risk.

"Everyone hears about the deficit, but there's over £26 billion in assets which belongs to the postmen and women who have paid their contributions every week of their working lives," he said.

Mr Cable said: "We are determined to safeguard Royal Mail for the future and help it tackle these challenges.

"We will come forward with new legislation in the autumn.

"It will draw heavily on Hooper's analysis and recommendations and the government's wider objectives, including the need for employees to have a real stake in the future of the business."

The Department for Business said a Postal Services Bill enabling the sale would be introduced during this session of Parliament, probably next month.