December 9 2013 Latest news:
Annabelle Dickson, Political Editor
Thursday, September 12, 2013
The Government has confirmed it is pressing ahead with controversial plans to privatise the Royal Mail by selling shares.
Business Secretary Vince Cable said an initial public offering (IPO) is expected in the coming weeks.
Members of the public will be able to apply for shares as well as institutional investors.
Mr Cable said it was an “important day” for the Royal Mail and its employees.
The announcement came ahead of a meeting of Communication Workers Union officials to discuss the sell-off and their plans for a strike ballot.
Denise Burke, Labour’s Prospective Parliamentary Candidate for North Norfolk, said: “The people of North Norfolk, much like the rest of the country, have serious concerns about what the government is doing with Royal Mail. This is a company that does make a profit - it makes a huge profit and so there is no reason why they should want to sell it off.
“The result of any such sale could put at risk the daily delivery, jobs, and the universal service we all get.
“We want to see villages like Hempstead, Happisburgh and Hindringham all get the same service that everyone else receives, and residents fear that this will not happen with a private company.
“There is an assumption that companies benefit from privatisation, but history tells us differently, and it is a real shame Norfolk’s MPs cannot see that.”
But Michael Fallon - the business minister responsible for the controversial plans - insisted “the Queen’s head is protected by law”.
He said: “The overall objective of our reform is to continue to secure the universal postal service - the six-day-a-week, same price goes anywhere service, which is vital for our economy.”
He insisted a proper regulatory framework had been put in place, with Ofcom receiving stronger powers to protect the universal service.
North Norfolk MP Norman Lamb, who was the business minister responsible for Royal Mail before last year’s reshuffle, claimed the company had been a “basket case” when the coalition came to power, with poor management and a work force that felt frustrated by its management.
He said: “Now it is doing well financially. It has got very strong growth in packages and parcels. But will government in tough times invest in a company that delivers parcels and packages or will they invest in schools, hospitals and the police? Of course it will invest in education, health and police.”
The Government confirmed that 10% of shares will be given to 150,000 Royal Mail workers.
Members of the public will be able to buy a minimum of £750 of shares.
Analysts expect the sell-off will make up to £3 billion.
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.”
All shares will be sold at the same price, with full details in a prospectus to be published “in due course”.
The IPO is expected in the coming weeks after ministers said they expected to complete the sale in the current financial year.
Royal Mail chief executive Moya Greene said: “Our strategy is delivering a revitalised company, with a unique, UK, multi-use network through which we are proud to deliver the universal postal service for all UK citizens.”