Top UK Politicos Open Door to Privatization of Royal Mail

16 May 2006

The proposed sale of shares to employees of Britain's state-owned Royal Mail is a steaming political potato that could badly scald the fingers of senior government ministers, among them chancellor of the exchequer (and prime-minister-in-waiting) Gordon Brown.

Brown has let it be known to Rupert Murdoch's UK megaphone The Times that he and trade and industry secretary Alistair Darling are ready to endorse the contentious quasi-privatization.

It is expected the share offer will be announced on Thursday coincident with the government's release of up to £200 billion ($376.7bn; €293.7bn) of taxpayers money to the monolithic postal business. On that day, the Royal Mail will also report its largest-ever annual profit of £600 million.

At the same time, the Royal Mail board, chaired by former Wal-Mart/Asda ceo Allan Leighton, is expected to announce the response from its 180,000 staff as to whether they want free shares in the organization. Few are expected to refuse such largesse with taxpayers' money.

However, the Union of Communications Workers and 199 Labour parliamentarians are opposing the move, the latter having signed a formal Commons motion of opposition. They see the gift of shares as the thin end of a wedge that could lead to eventual full scale privatization

Hands aloft in pious indignation, Her Majesty's Government denies any such intention. But a majority of Labour parliamentarians are cynical about the denial, pointing to a similar back-door move in Ireland where the state-owned telecoms company gifted shares to its employees prior to a stock market flotation of the rest of the business.

Meantime, the RM has already locked horns with the UCW over the issue of a rejected pay rise and its attempt to ban the union from conducting a workplace ballot on the Royal Mail's future.

Data sourced from The Times Online (UK); additional content by WARC staff