Royal Mail flotation on the cards

Picture: Getty
Picture: Getty
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ROYAL Mail staff are expected to be offered at least 10 per cent of shares today as part of ­Business Secretary Vince Cable’s privatisation plans.

Members of the public, foreign investors and banks will be invited to invest in a campaign similar to the “Tell Sid” drive which marked the sell-off of British Gas in the 1980s.

The flotation is likely to value the Royal Mail at between £2 billion-£3bn, and shares are likely to be offered for sale either this autumn or in spring 2014.

Mr Cable has previously indicated that the Post Office, which is now a separate business, would not be included in the sell-off but would be mutualised – giving postmasters and mistresses more choice over how to run their businesses.

It is expected that the £8.4bn deficit of the Royal Mail pension fund will be taken on by the UK government – to make the business more attractive to investors.

Yesterday, the Department of Business Innovation and Skills declined to comment on the details of the statement. However, Mr Cable has previously backed the sell-off. “This is an important package,” he has said. “It will secure the services that consumers and businesses rely on.

“It will give employees a stable company to work for, shares in the future of the business and the secure pension they deserve.

“It will remove the risk to taxpayers of an expensive bailout.” Mr Cable has previously indicated that he would not be averse to a foreign company taking control of Royal Mail.

However, the Communication Workers’ Union is opposing the privatisation and has threatened strike action if it goes ahead.

Union leaders yesterday appealed to the government to reconsider, saying it was not too late for a rethink.

A letter from CWU general secretary Billy Hayes and his deputy Dave Ward was sent yesterday to Business and Enterprise Minister Michael Fallon MP, urging him to think again about the future of the company, and consider alternative ways to improve services to customers while remaining in state ownership.

Mr Hayes said: “Nobody outside of government and their potential investors wants their postal service sold. The public consistently oppose the sale and recently 96 per cent of workers voted against.

“We are offering the government the opportunity to discuss how best to genuinely take Royal Mail forward.”

Mr Ward added: “Negotiations with Royal Mail have been ongoing about future terms and conditions for workers.”

He said the talks had reached a crucial stage but warned they would count for nothing if legally binding assurances were not forthcoming. He added: “Royal Mail workers have co-operated with modernisation and contributed to its success.

“We agreed a shared vision with Royal Mail and privatisation was never part of that.”