Royal Mail staff accuse government of trying to buy them off

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Royal Mail staff accuse government of trying to 'buy them off'

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Royal Mail staff have accused the government of trying to "buy them off" after privatisation plans that would see them handed thousands of pounds in free shares were unveiled.

Business Secretary Vince Cable said up to 10% of the new company would be given to around 150,000 postmen, postwomen and other employees under the £3 billion sell off - which will begin by the end of the financial year.

Mr Cable said putting the firm on a more commercial footing was crucial to securing the universal six-days-a-week service it currently provides.


The Communication Workers Union (CWU) said it would fight the proposals and added that its members were "too long in the tooth" to be swayed by windfalls.

Dave Ward, the CWU's deputy general secretary, told ITV News the sale of Royal Mail "will not secure the future long term success of the company".

However, Mr Cable told ITV News that "enlightened self-interest" would lead the unions to come round on the sell-off.

ITV News business editor Laura Kuenssberg reports:

In a statement to the House of Commons, the Business Secretary said the government would sell a majority stake in the business - expected to be 51% initially.

Employees who want to buy more shares on top of their free allocation will get priority, and the remaining shares will be available to the general public as well as institutional investors under the terms of the stock market flotation.

This is logical, it is a commercial decision designed to put Royal Mail's future on to a long-term sustainable basis.

It is consistent with developments elsewhere in Europe where privatised operators in Austria, Germany and Belgium produce profit margins far higher than the Royal Mail but have continued to provide high-quality and expanding services.

Now the time has come for Government to step back from Royal Mail, allow its management to focus wholeheartedly on growing the business and planning for the future.

It's now time for employees to hold a stake in the company and share in its success.

This Government will give Royal Mail the real commercial freedom it's needed for a long time.

– Vince Cable, Business Secretary

The company will be listed on the London Stock Exchange by the end of the financial year, he added.

Labour accused the coalition of selling the Royal Mail "on the cheap" in a bid to make up for George Osborne's failing economic policy.

Shadow business secretary Chuka Umunna told MPs the Government had failed to provide any justification for acting now.

Chuka Umunna outlines Labour opposition to the privatisation of Royal Mail.

Having nationalised the organisation's debts by taking on its pension liabilities, they now want to privatise the profit at the very time it is making money.

How on earth does that make any sense?

There is every sign this treasured national institution is being sold off on the cheap to get income quickly to a Treasury whose economic strategy has failed.

– Chuka Umunna, Shadow business secretary

Royal Mail's flotation is likely to be one of the biggest since British Gas was privatised in the 1980s but will not include the Post Office - which is now a separate company.

The government took responsibility of the firm's pension scheme in preparation for the sell-off.