The Government will privatise the Royal Mail

By Jonathan Isaby

It has been announced that the Government is to privatise the Royal Mail in what the Telegraph this morning suggests will be "the biggest sell off of a state-owned company for nearly two decades".

"About time too", will be the refrain of many Conservatives, I imagine, although it will be the Liberal Democrat Business Secretary, Vince Cable, who will be charged with overseeing the move.

The Telegraph explains:

Most of the shares will be sold to outside investors - either to private companies or through a public share offering. A small stake – possibly as much as 20 per cent – will be left in the hands of workers to buy their support for privatisation, as disclosed by The Daily Telegraph yesterday. The Post Office network, however, will remain state-owned.

Legislation to begin the sell off will be introduced this autumn and could be passed by next summer, with the first shares offered for sale in 2012. The announcement came after Richard Hooper, the Government’s independent postal service reviewer, published a report on the Royal Mail and warned that its finances had worsened over the past 18 months and that "without serious action" the company would "not survive in its current form".

Needless to say, the Communications Workers' Union is already agitating in opposition to the move, with its general secretary, Billy Hayes, saying yesterday:

"This could damage the service for all customers including millions of small businesses and potentially harm the UK economy... Closures, cuts and profit will rule while customers, small businesses, communities and taxpayers lose out. This report is politically motivated to please the ideology of the coalition."

Depressingly, The Independent reports that "the union, which held a series of strikes last year in a row over modernisation, has not ruled out fresh industrial action as it mounts another campaign to keep the Royal Mail wholly publicly owned."