Michael Fallon is the Minister for Business and Enterprise and MP for Sevenoaks
This is an important day for Royal Mail, its employees and customers. Royal Mail needs to be able to compete with the internet, smart phones and international postal operators - and to be able to adapt to the changing postal market and seize new business opportunities.
That’s why I have announced that the Government will sell shares in Royal Mail through an initial public offering on the London Stock Exchange. This sale will complete the final part of our reforms of the postal sector which Parliament debated and decided over two years ago. Our objective is to continue to secure the universal service – the six day a week, same price, goes anywhere service which is vital to the UK economy. We have already put in place a proper regulatory framework and given Ofcom stronger powers to take the action necessary to protect the universal service. We have also taken away Royal Mail's historic pension liabilities which were crippling the company's financial position.
Our reforms, together with the hard work of Royal Mail employees, have put Royal Mail on the road to sustainable health. But under the restrictions of public ownership Royal Mail's core mails business lurched between profit and loss in 5 of the last 12 years. Losses were around £1bn, and over 50,000 jobs went during that period. The sale of shares will give Royal Mail the commercial freedom it needs to succeed. It will give the company future access to capital it needs for investment – to seize the opportunities for growth such as increasing parcel volumes from the boom in online shopping. It will give Royal Mail commercial confidence – free from Whitehall interference.