Mutual ownership mooted as Royal Mail faces competition

The Government could hand over ownership of the Royal Mail to its workforce after a review of the service's future, it has emerged.

The Government could hand over ownership of the Royal Mail to its workforce after a review of the service's future, it has emerged.

The Government committed itself not to privatise Royal Mail in the election, but it is thought that some Labour Party figures and Royal Mail management are drawn to the idea that workers could be given shares in the postal operator in a "John Lewis"-style ownership structure. Royal Mail would borrow about £2bn to buy out the Government under the scheme, which is being floated in Westminster and which is likely to receive the backing of Allan Leighton, the chairman of Royal Mail.

The newly created Department for Productivity, Energy and Industry, led by Alan Johnson, a former postman, will soon appoint someone to head a review of "the impact on the Royal Mail of market liberalisation". From next year, the postal market will be fully opened up to competition.

The Labour election manifesto said: "We have given Royal Mail greater commercial freedom and have no plans to privatise it. Our ambition is to see a publicly owned Royal Mail fully restored to good health, providing customers with an excellent service and its employees with rewarding employment."

Although this document does seem to rule out a change to public ownership of Royal Mail, political and industry sources believe some form of employee ownership could still be justified. They say the document goes on to commit the Government to the review of postal liberalisation, which would involve some consideration of Royal Mail's ownership structure.

Even an employee ownership plan would face strong union resistence. A spokesman for the Communication Workers Union said: "There's no change in the union's position. Any share scheme would be seen as privatisation."

Mr Leighton has said he "would like employees to share in the success" of the post office, privately suggesting this could best be achieved by giving shares to workers. A Royal Mail spokesperson said: "The future of the Royal Mail is a matter for our shareholders."

Royal Mail will announce annual results next week which will show operating profits of more than £500m, of which £200m will be paid out to the 195,000 postal workers in the form of £1,000 bonuses.