Royal Mail Privatisation Plans To Be Announce

Royal Mail Privatisation Plans To Be Announce

  • Posted: Jul 10, 2013
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 The Government is to set out one of the biggest privatisation plans in decades, valuing the company at an estimated £2.5bn

Iimage Royal mailThe process of selling off the Royal Mail begins today with the promise of free shares for workers weighed against fears about layoffs and higher postage costs.

Business Secretary Vince Cable will outline details of the flotation to MPs in the Commons at 12.30pm.

He will be hoping the offer of shares worth £2,000 each to its 150,000 staff, as earlier revealed by Sky News, will stave off fierce opposition to the sale among workers and union ranks.

The Initial Public Offering (IPO) will value the business at up to £3bn while the stake offered to staff would represent a 10% interest.

Moya Greene, chief executive of Royal Mail, has held talks with scores of potential investors in recent months in an attempt to persuade them to back the plans.

But she faces opposition from unions and many employees, who fear privatisation will lead to a shake-up of services, higher prices and job cuts.

Steve Butts, a Royal Mail staff member for the past 32 years, told Sky News: “I think privatisation will only bring a race to the bottom for employees.

“Any private investor would always want to make money and the way they are going to do that is to drive down our terms and conditions.”

The scale of resistance will be underlined when the Communication Workers Union delivers a giant postcard to Royal Mail HQ protesting against the move.

Supporters of the privatisation argue that it would raise hundreds of millions of pounds to help modernise the mail system in Britain.

Robert Hammond, director of post and market analysis at Consumer Futures, told Sky News: “I would hope that a privatised Royal Mail would be looking to expand on their products and services, and to make those services ready for 21st century consumers.”