Royal Mail employees will be offered at least 10% of the shares when the company is privatised,UK Business Secretary Vince Cable announced yesterday.
Cable said the “engagement and participation of staff in turning this company around” was “justas important” as raising private capital to help Royal Mail to compete, putting “lighter-touchregulation” in place, and the contribution that the sale of the state-owned postal company wouldmake to reducing the UK’s national debt.
“That is why our legislation will include a specific provision to make available at least 10% ofthe shares in Royal Mail to employees, as part of the privatisation process,” he said. “This is aonce-in-a-generation chance to transform the culture at Royal Mail – energising everyone andallowing employers and employees to share in the company’s future success.”
Speaking in Liverpool at the annual conference of his Liberal Democrat party, Cable stressedthat the UK’s Post Office network was not for sale, and claimed there would be “no repeat of theprevious closure programmes” of former governments.
A briefing note from Cable’s Department for Business, Innovation and Skills (BIS) said theextent of private sector investment and the speed at which the government begins to divest shareswould depend on market conditions, with the aim of getting the best value for the taxpayer andsecuring a sustainable future for Royal Mail.
“If Royal Mail is going to modernise, it will need to bring its workers along with it,” thedepartment added. “A successful Royal Mail will have better engagement and stronger participationfrom its workers.”
But postal union representatives poured scorn on the latest proposal. Billy Hayes, the generalsecretary of the Communication Workers Union, which opposes any privatisation, said: “Any offer ofshares to employees is deeply patronising for people who have invested their working lives to apublic service. The public currently owns 100% of the Royal Mail, and now 90% is to be sold off tothe banks and financial institutions that have created Britain’s current financial crisis.”
The UK government said further detail would be announced as part of the Postal Services Billthat will be introduced to the UK’s parliament this autumn. It said the Bill would draw heavily onthe analysis and recommendations made by Richard Hooper as part of his latest report, ‘Saving theRoyal Mail’s universal service in the digital age’, which was published last week.
Hooper’s report made three main recommendations: A new less burdensome regulatory framework isneeded with responsibility for regulation moving from Postcomm to Ofcom; the company’s pensiondeficit should be taken over by the government as part of the wider range of measures; and privatesector capital must be introduced into Royal Mail in the form of sale to a partner/trade investoror an IPO.
Royal Mail has more than 150,000 employees.
