east 10 per cent of Royal Mail will be owned by employees when the postal service
is eventually privatised, Vince Cable announced yesterday.
Speaking at the Liberal Democrat conference in Liverpool, the business secretary said Royal Mail’s 155,000 workers would benefit from the “largest employee shares scheme of any privatisation for 25 years”.
He added: “The Liberal Democrats were the first and only party to call for an employee stake and we are now implementing it in government.”
The government has not yet decided whether it will give away the shares or sell them at a hefty discount, although it will try to find a way of making employees hold on to their stock rather than immediately offloading it.
Cable is hoping the plan will avert a wave of strike action when the private owner begins trying to modernise archaic postal service.
“If Royal Mail is going to modernise, it will need to bring its workers along with it,” an aide to Cable said, adding the Communication Workers Union (CWU) had already downed tools twice over attempts to drag the postal service into the 21st Century.
Cable is keen to draw lessons from the success of companies with significant employee share ownership like John Lewis, which has shed staff in the recession with very little unrest.
However, the CWU hit out at Cable’s plans, arguing it was “deeply patronising” to people who had spent their entire lives working at Royal Mail.
“The British public currently owns 100 per cent of Royal Mail and now 90 per cent is to be sold off to the banks and financial institutions that have created the current financial crisis,” said Bill Hayes, CWU general secretary.
The government is hoping to privatise the Royal Mail next year, after it has passed legislation in the autumn, either by finding a trade buyer or through an IPO. It will keep a small stake in the interim, but has no plans to be a long-term shareholder.