By Claire West
Business Secretary Vince Cable today announced that at least 10% of the shares in Royal Mail will go to its employees.
This will be the largest employee shares scheme of any privatisation for 25 years in terms of the number of workers who will benefit — second only to the privatisation of British Telecom in 1984.
The percentage being allocated to employees is also potentially one of the largest — larger than BT, British Gas or British Airways.
This new commitment will be written in to the Postal Services Bill, which the Government plans to introduce in the autumn.
Vince Cable said:
“I want to take action to secure the future of two cornerstones of British life — Royal Mail and the Post Office. The much valued Post Office is not for sale and there will be no repeat of the previous closure programmes.
“But Royal Mail is a different business, with different challenges. It is struggling under the weight of some huge pressures: pressure from email and falling mail volumes; pressure from a dire pension position; pressure from a lack of money to invest.
“The only way to save it for the future is to bring in new private capital to support the ongoing modernisation and growth opportunities. This will bring new commercial disciplines and the enormous public sector deficit means that the taxpayer does not have an endless supply of money to meet the company’s investment needs.
“We also have to tackle the multi-billion pound pension deficit and put in place lighter touch regulation that gives the company a good chance in the market and protects the universal postal service that so many of us depend on.
“But just as important is the engagement and participation of staff in turning this company around. That is why our legislation will include a specific provision to make available at least 10% of the shares in Royal Mail to employees, as part of the privatisation process. This is a once in a generation chance to transform the culture at Royal Mail — energising everyone and allowing employers and employees to share in the company’s future success.”