10% of privatised Royal Mail shares will go to staff
Further details on the UK coalition government’s plans to privatise the Royal Mail emerged yesterday. Included in the scheme are the protection of the “universal service”, that guarantees delivery to all 29 million British homes regardless of how remote they are, and also a share plan that will distribute 10% of the company shares to existing staff. It’s expected that the flotation price of Royal Mail will be around £2bn-£3bn.
Business Secretary Vince Cable said in the House of Commons on Wednesday: “The government’s decision on the sale is practical, it is logical, it is a commercial decision designed to put Royal Mail’s future on a long-term sustainable business. 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, and allow its management to focus wholeheartedly on growing the business.”
The network of 11,780 Post Offices, which is a separate company from Royal Mail, will remain in public hands leading to fears that Post Offices will come under greater pressure to promote Royal Mail products in future to sate demand for greater profits.
It is also not expected that there will be a national marketing campaign to the public such as the “Ask Sid” campaign in the 1980s. Royal Mail head Moya Greene is reported to have been punting the sell-off to potential investors in the UK, North America and continental Europe.
I’m sure that not all of you will agree, but I oppose Royal Mail privatisation. It doesn’t solve the everyday problems that the service faces and represents the thin end of the wedge.
The universal service is one thing (and vital) but how long before 6 day deliveries get shelved or the parcel division gets hived off? Greater commercial freedom is desperately needed but could be provided under public ownership with imagination and still preserve the best of Royal Mail.
In Britain the Government spends cash on, and subsidises, many things that are vital to business. Roads for one, the railways another, and the Royal Mail should be considered similarly: an effective postal service greases the wheels of commerce. Cable is wrong to focus on profits for RM.
That 10% of the Royal mail will go to the staff seems entirely fair. If anything it seems a bit stingy. The Bank of England has spent many hundreds of millions of pounds on quantitative easing (QE) these past years. The shares might not be sold for 3 years, but putting such funds at the disposal of your average postie seems preferable and an acceptable stimulus.
I fear that the sell-off of Royal Mail is a fundraiser that gives George Osborne a few more billion quid to play with at the next budget. Times are doubtless tough. But we’ll rue the day we flogged the Royal Mail. Just look at the utilities: which reminds me, I must pay my greatly inflated gas bill to the French Government. << (EDF)