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Vince Cable looking to privatise Royal Mail

Vince Cable, the business secretary, is set to announce plans to part privatise Royal Mail in a move similar to that announced by Peter Mandelson some months ago. However, the structure of any potential deal will be slightly different in that the post office network will not be included as the government is only looking to take on a minority shareholder to raise additional funds for the development of Royal Mail.

While we await specific terms of any potential deal, likely to be forthcoming over the next two months, there is no doubt that this move will put the UK government at loggerheads with trade unions. Whether this is a deliberate ploy to flush out the unions and taint their reputation in the eyes of the public is open to debate but there is no doubt that battle lines are being drawn. Even though in many ways the UK government has little option but to look to outside assistance to develop areas such as the Royal Mail this is unlikely to break much ice with the unions.

The formal part privatisation of the Royal Mail is just the first step in a total restructuring of the UK public sector which could see a number of outside parties brought in to assist with future investment in various areas. The need to reduce financial liabilities in the short to medium term has never been more vital.

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