The Government has finally given formal notice to the stock exchange that it plans to privatise Royal Mail “in the coming weeks”, despite mounting opposition from union barons and rival businesses.
Although its value has yet to be determined, business minister Michael Fallon predicts it will bring in around £3bn to the Government’s coffers. Speaking on BBC Breakfast, Fallon said: “Royal Mail is one of the strongest, biggest brands there is. And it is now for the first time going to be able to access the markets to raise the money it needs to invest in the future.”
The decision comes as the campaign to fight the sell-off shifts up a gear. Despite previously supporting privatisation, TNT chief executive Nick Wells has now cried foul, branding the fact that Royal Mail still does not pay VAT “outrageous”.
Wells said: “Royal Mail needs access to capital for its modernisation plans. However, privatising a monopoly is bad for consumers, bad for business and bad for UK plc.”
He added: “We are not against privatisation per se but we need a level playing field. It would be outrageous to privatise a Royal Mail that has a 20% VAT advantage.”
Meanwhile the TUC Congress in Bournemouth has given its backing to Communication Workers Union plans to ballot members for strike action, which, if successful could come slap bang in the middle of the sale. It could also wreak havoc with Christmas mail.
CWU deputy general secretary Dave Ward has also criticised Labour Party leader Ed Miliband for his inaction, telling him to get off his “backside”.
Ward said: “We have not gone through all of that pain to save the industry only to hand it over to private investors who will take more money out than they will ever put in.
“I go to sorting offices up and down the country and workers there are not talking about a new relationship. When are you going to get off your backside and stand up for a great public service like the Royal Mail?”
He added: “We have a warning for investors who might be thinking they will come in for a quick killing – we are not going away, we will defend the postal service and our members with everything we have got.”
However, the DMA has given the sell-off a “cautious welcome”, claiming increased competition will benefit the direct marketing industry. Executive director Chris Combemale said: “Privatising Royal Mail should lead to increased competition and long-term investment in infrastructure, which should lead to lower costs for online retailers using the service to deliver goods to consumers. Businesses that use direct and transactional mail to communicate with their customers should also benefit from improved services and competitive prices.”
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Government finally confirms Royal Mail sale ‘within weeks’ but opponents cry foul http://t.co/z8ep9H8oQ6 #directmail #directmarketing