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Royal Mail regulation faces 'fundamental review'

The regulation of Royal Mail is to be reviewed by Ofcom following the collapse of Whistl - the company formerly known as TNT.

Ofcom has launched a 'fundamental review' of the regulation of Royal Mail Credit: PA

Ofcom said it has launched a "fundamental review" of the regulation and its review would ensure that regulation "remains appropriate and sufficient to secure the universal postal service".

The collapse of Whistl has left Royal Mail no national competition in the direct-delivery letters market.

It will look into the absence of national competition and whether Royal Mail's prices are "both affordable, and sufficient to cover the costs of the universal service."

Royal Mail shares dropped 2% following the announcement.


Royal Mail sell-off part of £4.5bn of extra cuts

The sale of Royal Mail forms part of a wider programme of cuts and savings unveiled by government finance chiefs today.

Chancellor George Osborne revealed he would sell off taxpayers' remaining 30 per cent stake in the postal firm, worth around £1.5 billion, on top of a £3bn package of other asset sales and efficiencies.

George Osborne in the House of Commons today Credit: PA

The extra savings will add to the £13bn of cuts already being made by Whitehall departments, and include:

  • Savings in the higher and further education sectors
  • Administration costs reduced at bodies overseen by the Department for Education
  • Similar cost-cutting at bodies overseen by the Department for Culture, Media and Sport
  • The Department for Transport will sell £345m worth of land around King's Cross

The NHS, schools and international aid budgets have been protected from any of the additional cuts.

Labour: Chancellor's long-term plan 'totally ripped up'

Labour have accused Chancellor George Osborne of "ripping up" his long-term plan after he announced an extra £4.5 billion of budget cuts.

The package of asset sales and additional savings comes on top of £13bn of spending reductions already set out - and includes the sell-off of the government's remaining 30 per cent stake in Royal Mail.

Shadow Chancellor Chris Leslie Credit: PA Wire

During a debate in the Commons today, Shadow Chancellor Chris Leslie told Mr Osborne:

It sounds to me as though any semblance of a long-term plan has been totally ripped up, that we've got panic in the Treasury, that we've got chaos with in-year public spending decisions taken.

Why didn't you announce those in the March Budget if they were part of some sort of long-term continuum?

Have you suddenly decided to rapidly change your course when it comes to public expenditure in that way and why do it in such a shabby way?

– Chris Leslie, Labour

To laughter, Mr Osborne replied: "Only the Labour Party will think it's 'shabby' to make an announcement first in the House of Commons. We set out two weeks ago that we were going to find further efficiencies and savings in government. That is what we deliver today."

Osborne: Selling Royal Mail shares 'right thing to do'

The government is to sell off its remaining 30 per cent stake in Royal Mail, Chancellor George Osborne has announced as he set out proposals for cutting departmental spending by £3 billion this year.

The stake is currently said to be worth around £1.5 billion.

The government to sell off remaining 30% Royal Mail stake Credit: Chris Radburn/PA Wire

Speaking during a debate in the House of Commons, he told MPs it was the "right thing to do".

I am today announcing that the Government will begin selling the remaining 30% shareholding we have in the Royal Mail.

It is the right thing to do for the Royal Mail, the businesses and families who depend on it - and crucially for the taxpayer.

– George Osborne, Chancellor

Initial reports suggest none of the shares being offered up for sale will be reserved for employees, who received 10 per cent during the last sell-off.

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