Royal Mail privatisation ‘within weeks’, says government

Business Secretary Vince Cable announced on Thursday that an initial public offering (IPO), by which shares in the 500-year-old Royal Mail business will be offered to private buyers, will take place in the coming weeks.

The sale, which would see shares offered to members of the public and institution, would value the business at £3bn.

We will be balloting our members for strike action. Dave Ward, CWU

Mr Cable said: “The government is taking action to secure a healthy future for the company. These measures will help ensure the long-term sustainability of the six days a week, one price goes anywhere universal postal service.

“By announcing that we intend to move ahead with a sale of shares in Royal Mail we are completing the third and final part of the reforms agreed in parliament two years ago.”

‘Thousands of closures’

However, unions and the Labour Party have hit back at the announcement, saying legitimate concerns about the privatisation have not been addressed, and that the government is taking a gamble in order to fill a hole in its coffers.

Royal Mail Chief Executive Moya Greene was booed on Thursday when she addressed a meeting of the Communication Workers’ Union (CWU) which represents 134,000 postal workers.

Very poor and unconvincing speech from Moya Greene. No chance of winning any debate with postal workers today #cwu #SaveOurRoyalMail

— CWU SW/SW (@CWU_SWSW) September 12, 2013

“Talk of a ballot for industrial action makes no sense when there is a significant three-year deal on the table and negotiations are ongoing,” she told CWU members. “There should not be a strike at this crucial time. If businesses can’t rely on us, they will look elsewhere to protect their own business.”

On Tuesday, CWU general secretary Dave Ward addressed the TUC in Bournemouth, with a message to those who want to privatise: “Hands off our Royal Mail”.

The government has not addressed the huge concerns which remain on the impact the Royal Mail sale. Chuka Umunna

“The government has announced its intention to privatise Royal Mail. But we had our own announcement last week: we will be balloting our members for strike action,” he said.

“What’s frustrating about the debate on the future of postal services is that we’re against change. But we’re not through all the pain of change just to hand it over to private investors – not when the fortunes of the company have been improved, literally delivered on the backs of our members.”

NFSP general secretary George Thomson said: “I am extremely disappointed and concerned that the government is pressing ahead with a plan that will undoubtedly jeopardise the future of thousands of post offices.

“We simply have not had the promised new government work that needs to be delivered before the sale of Royal Mail and which would safeguard the future survival of an independent post office. We are now calling on the government to halt the sale until we can be sure that new work is forthcoming.

“We are also urging ministers to retain a share in Royal Mail to ensure government has the ability to protect the interests of post offices and their customers, which are already under serious threat.

“Failure to do so will amount to a reckless gamble and risk thousands of post office closures that will rip the heart out of communities across the country.”

‘Politically motivated’

The Labour Party has also criticised the government’s announcement.

Shadow Business Secretary Chuka Umunna said: “Ministers are pushing ahead with this politically motivated fire sale of Royal Mail to fill the hole left by George Osborne’s failed plan.

“The government has not addressed the huge concerns which remain on the impact the Royal Mail sale will have on consumers, businesses and communities, but ministers are ploughing on regardless.”

The IPO is expected to take place in the coming weeks, with the sale completing within this financial year.