Royal Mail in line for 'Tell Sid' privatisation

Royal Mail could be sold back to the public in a "Tell Sid"-style share offering redolent of the Conservatives' big state privatisations of decades ago, the Coalition Government said yesterday, as it confirmed plans to end hundreds of years of state ownership of the national postal service.

In a much more extensive sale than expected, the Government said it would dispose of some or all of the state's 100 per cent holding in the publicly owned company in a private sale or a public share offering, akin to the sell-offs of British Telecom, British Airways and British Gas in the 1980s.

To make the shrinking business more attractive, the state will take over Royal Mail's £8bn pension black hole, assuming the fund's future liabilities of £34bn, but gaining assets of £26bn, which may be sold off to reduce the budget deficit.

At the same time, the Government promised to save Britain's 11,500 Post Office branches by hiving them off from Royal Mail Group into a mutual, with talks already under way with the Co-operative movement.

The Business Secretary, Vince Cable, said Royal Mail's requirement to deliver letters all over the UK six days a week for the same price – its "universal service obligation" – would be written into the contract of any sale. Previous attempts by Conservative and Labour administrations to part-privatise the company have failed, after running into fierce opposition from unions and customers. Mr Cable said delay was no longer possible because of the poor state of the business and the public coffers.

"Royal Mail is in a difficult position," he said. "There is no hiding from the facts: mail volumes falling, a multi-billion-pound pension deficit, less efficiency than competitors and an urgent need for more capital at a time when there are huge constraints to the public purse. My policy is to put them [Royal Mail and the Post Office] on a stable footing for the future."

The Government said it was open-minded about who would buy the service, or when it would be sold. Buyers could include private equity firms or existing postal service operators, such as Dutch-owned TNT. But the Business Secretary also said there could be an IPO (Initial Public Offering), in which Royal Mail would be floated on the London Stock Exchange.

Asked whether that would amount to a "Tell Sid"-style privatisation – a reference to Margaret Thatcher's cut-price sale of British Gas in 1986, which was aimed at encouraging ordinary people to buy shares – he replied: "It could be, that's one of the options." He added that in any sale the Royal Mail's 150,000 staff would receive 10 per cent of shares.

The Government said there would be no further closures of Post Offices, which would be found new trade. "We will break the cycle of declining visitor numbers [to Post Offices] through new ideas and new services to win back customers," Mr Cable said. He added that he hoped the branches would be able to service current account customers of the main high-street banks, two of which – RBS and Lloyds-HBOS – are now partly publicly owned.

The Post Office could be turned into a John Lewis-style partnership, owned by its employees, or on a Co-operative basis, owned by postmasters and mistresses, staff and even the public.

The Communication Workers Union criticised the Government's "obsession" with privatisation and warned that customers and Post Offices would suffer. "Handing postal services over to the City spivs and gamblers that Vince Cable recently denounced, but is now feeding, will be bad news for everyone," said its general secretary Billy Hayes.

Start your day with The Independent, sign up for daily news emails
Voices
There will be a chance to bid for a rare example of the SAS Diary, collated by a former member of the regiment in the aftermath of World War II but only published – in a limited run of just 5,000 – in 2011
charity appealTime is running out to secure your favourite lot as our auction closes at 2pm tomorrow
Arts and Entertainment
Mark Wright has won The Apprentice 2014
tvThe Apprentice 2014 final
News
File: James Woods attends the 52nd New York Film Festival at Walter Reade Theater on September 27, 2014
peopleActor was tweeting in wake of NYPD police shooting
Arts and Entertainment
X Factor winner Ben Haenow has scored his first Christmas number one
music
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Sport
Martin Skrtel heads in the dramatic equaliser
SPORTLiverpool vs Arsenal match report: Bandaged Martin Skrtel heads home in the 97th-minute
News
Detective Tam Bui works for the Toronto Police force
news
News
The monkey made several attempts to revive his friend before he regained consciousness
video
Extras
indybest
Arts and Entertainment
Darrell Banks’s ‘Open The Door To Your Heart’
music
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Telesales & Customer Service Executives - Outbound & Inbound

£7 - £9 per hour: Recruitment Genius: Are you outgoing? Do you want to work in...

Recruitment Genius: National Account Manager / Key Account Sales

£30000 - £35000 per annum: Recruitment Genius: An opportunity has arisen for a...

Recruitment Genius: Operations Manager

£30000 - £35000 per annum: Recruitment Genius: An exciting opportunity to join...

Recruitment Genius: Recruitment Consultant

£30000 - £35000 per annum: Recruitment Genius: We have an excellent role for a...

Day In a Page

The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there
The 12 ways of Christmas: Spare a thought for those who will be working to keep others safe during the festive season

The 12 ways of Christmas

We speak to a dozen people who will be working to keep others safe, happy and healthy over the holidays
Birdwatching men have a lot in common with their feathered friends, new study shows

The male exhibits strange behaviour

A new study shows that birdwatching men have a lot in common with their feathered friends...
Diaries of Evelyn Waugh, Virginia Woolf and Noël Coward reveal how they coped with the December blues

Famous diaries: Christmas week in history

Noël Coward parties into the night, Alan Clark bemoans the cost of servants, Evelyn Waugh ponders his drinking…
From noble to narky, the fall of the open letter

From noble to narky, the fall of the open letter

The great tradition of St Paul and Zola reached its nadir with a hungry worker's rant to Russell Brand, says DJ Taylor
A Christmas ghost story by Alison Moore: A prodigal daughter has a breakthrough

A Christmas ghost story by Alison Moore

The story was published earlier this month in 'Poor Souls' Light: Seven Curious Tales'
Marian Keyes: The author on her pre-approved Christmas, true love's parking implications and living in the moment

Marian Keyes

The author on her pre-approved Christmas, true love's parking implications and living in the moment
Bill Granger recipes: Our chef creates an Italian-inspired fish feast for Christmas Eve

Bill Granger's Christmas Eve fish feast

Bill's Italian friends introduced him to the Roman Catholic custom of a lavish fish supper on Christmas Eve. Here, he gives the tradition his own spin…
Liverpool vs Arsenal: Brendan Rodgers is fighting for his reputation

Rodgers fights for his reputation

Liverpool manager tries to stay on his feet despite waves of criticism
Amir Khan: 'The Taliban can threaten me but I must speak out... innocent kids, killed over nothing. It’s sick in the mind'

Amir Khan attacks the Taliban

'They can threaten me but I must speak out... innocent kids, killed over nothing. It’s sick in the mind'
Michael Calvin: Sepp Blatter is my man of the year in sport. Bring on 2015, quick

Michael Calvin's Last Word

Sepp Blatter is my man of the year in sport. Bring on 2015, quick