Royal Mail chief warns EU on plan for pension fund

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The Independent Online

Moya Greene, the chief executive of Royal Mail, has stressed it is "essential" that the European Commission allows the Government to relieve it of its crippling £4.6bn pension deficit.

She spoke as strong performances from the Post Office and its General Logistics Systems (GLS) parcel delivery business helped to boost its profits by more than three times over the half-year to 25 September. The Government plans to take responsibility for Royal Mail's pension fund deficit from April.

Ms Greene said: "It will be essential for Royal Mail that the European Commission approves the Government's State Aid application to relieve the company of its historic pension liability and allow restructuring of the Royal Mail balance sheet."

The group delivered profits of £67m, up from £22m last year, helped by a tighter control on costs. Royal Mail's revenues rose by 5 per cent to £4.61bn.

The Post Office more than tripled profits to £55m, while GLS also grew, by 14 per cent, to £58m. But its UK letters business suffered a loss of £41m, despite raising the cost of first-class stamps from 41p to 46p in April. While this improved on last year's £55m loss, the volume of letters fell by 6 per cent.

As part of its modernisation drive, Royal Mail has cut 5,000 jobs in the past year and 50,000 since 2003.