Mandelson blames unions for Royal Mail woes

Tuesday, 7 July 2009 12:00 AM

By Liz Stephens

Lord Mandelson blamed the Communication Workers Union (CWU) today for the ongoing stalemate with Royal Mail.

Speaking during a business and enterprise committee meeting, the business secretary said: "Royal Mail's response throughout has been to continue to consult. I believe that has to be matched by the workforce and their union if any progress is going to be made."

He added: "Until they accept the need for change they are not going to be able to address the problems Royal Mail has."

The accusations came after the government abandoned its controversial bill to part-privatise the Royal Mail last week.

At that time, Lord Mandelson blamed market conditions for the lack of credible bidders for the proposed 30 per cent stake in the business.

The failure to part-privatise the Royal Mail was a severe blow to the government, who saw it as essential to modernising the business, which is under threat from competitors and new technologies.

As part of the part-privatisation deal, the government had originally planned to take on the £10 billion pension fund deficit and to change regulation.

But Mandelson recently put himself on a collision course with unions and the pension trustees of Royal Mail by refusing to bail out the pension deficit.

Pension fund trustees are expected to revise their estimate of the deficit from £3.3 billion to £10 billion in the next few weeks, which could potentially bankrupt the company.

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