UK: Royal Mail sale to begin within weeks Government reveals
- Credit: Archant
The Government has confirmed it is pressing ahead with controversial plans to privatise the Royal Mail by selling shares.
Business Secretary Vince Cable said an initial public offering (IPO) is expected in the coming weeks.
Members of the public will be able to apply for shares as well as institutional investors.
Mr Cable said it was an “important day” for the Royal Mail and its employees.
The announcement came ahead of a meeting of Communication Workers Union officials to discuss the sell-off and their plans for a strike ballot.
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The Government confirmed that 10% of shares will be given to 150,000 Royal Mail workers.
Members of the public will be able to buy a minimum of £750 of shares.
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Analysts expect the sell-off will make up to £3 billion.
Mr Cable said: “The Government is taking action to secure a healthy future for the company. These measures will help ensure the long-term sustainability of the six days a week, one price goes anywhere universal postal service.
“By announcing that we intend to move ahead with a sale of shares in Royal Mail we are completing the third and final part of the reforms agreed in Parliament two years ago.”
All shares will be sold at the same price, with full details in a prospectus to be published “in due course”.
The IPO is expected in the coming weeks after ministers said they expected to complete the sale in the current financial year.
Royal Mail chief executive Moya Greene said: “Our strategy is delivering a revitalised company, with a unique, UK, multi-use network through which we are proud to deliver the universal postal service for all UK citizens.”
Chuka Umunna, shadow business secretary, said: “Ministers are pushing ahead with this politically motivated fire sale of Royal Mail to fill the hole left by George Osborne’s failed plan.
“This is taking place despite opposition from a huge coalition including the Conservative Bow Group, the Countryside Alliance, the National Federation of Subpostmasters (NFSP), the cross-party BIS (Department for Business, Innovation & Skills) Select Committee as well as Royal Mail employees themselves.
“The Government has not addressed the huge concerns which remain on the impact the Royal Mail sale will have on consumers, businesses and communities, but ministers are ploughing on regardless.”
NFSP general secretary George Thomson said: “I am extremely disappointed and concerned that the Government is pressing ahead with a plan that will undoubtedly jeopardise the future of thousands of post offices.
“We simply have not had the promised new Government work that needs to be delivered before the sale of Royal Mail and which would safeguard the future survival of an independent Post Office.
“We are now calling on the Government to halt the sale until we can be sure that new work is forthcoming. We are also urging ministers to retain a share in Royal Mail to ensure government has the ability to protect the interests of post offices and their customers, which are already under serious threat.
“Failure to do so will amount to a reckless gamble and risk thousands of post office closures that will rip the heart out of communities across the country.”
The Communication Workers Union’s meeting of local officials today is due to be addressed by the Royal Mail chief executive.
The union is planning to ballot its members for strikes in the next few weeks over pay, jobs and other issues linked to privatisation.
Mario Dunn, campaign director of Save Our Royal Mail, said: “This might be good news for the bankers but it is bad news for Royal Mail customers.
“The elderly, people in rural areas and small businesses will be particularly hard hit by the inevitable price rises and service reductions that will follow this privatisation.
“Royal Mail is a successful public sector enterprise. This is an unnecessary and ultimately political privatisation.”