Labour MPs furious at Royal Mail sell off plans

Plans for £3 billion Royal Mail privatisation will improve services, Ministers insist, yet Labour MPs have claim it will lead to a poorer service

Andrew Milligan/PA Wire Royal Mail postal worker John McLean moving parcels at the Glasgow Mail Centre in Springburn
Royal Mail postal worker John McLean moving parcels at the Glasgow Mail Centre in Springburn

Controversial plans to sell off the Royal Mail will lead to a poorer service for the public - with private investors enjoying the profits, Labour MPs have claimed.

Business Secretary Vince Cable yesterday confirmed they were pressing ahead given formal notice to the stock exchange that it plans to privatise the Royal Mail “in the coming weeks”.

It is expected to raise an estimated £3m.

Ministers insisted the public would benefit because the Royal Mail would raise funds to invest in modernisation and better services.

Royal Mail workers will be given 10% of shares while members of the public will be invited to buy a stake in the company at a minimum cost of £750 each.

The Post Office was separated from Royal Mail in 2012 and is not for sale.

Ministers stressed that legal safeguards would be in place to enforce minimum standards, including the provision of a six-day-a-week service in every part of the country.

But Chi Onwurah, Labour MP for Newcastle Central, said that the Royal Mail would become another private sector monopoly making profits at the expense of customers.

Newcastle Central MP Chi Onwurah
Newcastle Central MP Chi Onwurah
 

Speaking in the Commons, she said: “The only time that national monopoly networks of this type work in the private sector is when we have real competition at the infrastructure level on the ground, as in telecoms.”

She asked business minister Michael Fallon: “Is he truly proposing that we’re going to have multiple posties delivering to doorsteps from north Devon to Newcastle?

“Or are we going to end up with another bloated private sector monopoly vested interest, as we have seen in water, energy and rail?”

Middlesbrough Labour MP Tom Blenkinsop warned that Government could allow a privatised Royal Mail to cut deliveries to five days a week instead of six.

Guy Opperman, Conservative MP for Hexham, said he welcomed measures to ensure the Royal Mail had funds “to invest and innovate” but told ministers his Northumberland constituents wanted to be certain that there would continue to be a universal six-day-a-week service.

Business minister Michael Fallon told him that the level of service was guaranteed by law.

Speaking after the statement, Lib Dem Sir Alan Beith, MP for Berwick-upon-Tweed, said: “Representing a rural constituency, my concern is that we keep a universal postal service and that we protect pay and pensions for the local people who provide that service.

Berwick MP Sir Alan Beith
Berwick MP Sir Alan Beith
 

“The Government has put the universal service in to law, plugged a hole in the Royal Mail’s pension scheme and offered a better deal to postal staff than the rest of the public services, so I think this is a sensible way forward.”

And Catherine McKinnell, member of parliament for Newcastle North said: “It is really concerning that a decision on the future of something so important seems to be motivated more by a quick cash grab to prop up the Government’s damaging economic plan rather than doing what is right for taxpayers.

“Royal Mail is one of our most treasured institutions and there is understandably huge opposition to the sale from across the board. The Government have refused to listen and seem determined to go ahead completely ignoring quite legitimate concerns.”

The announcement was condemned by unions and could lead to strike action over the Christmas period.

Royal Mail chief executive Moya Greene met 1,200 members of the Communication Workers Union in Birmingham yesterday in a last-ditch bid to win their support, but she was reportedly booed at the private event.

Dr Cable said: “The Government is taking action to secure a healthy future for the company. These measures will help ensure the long-term sustainability of the six-days-a-week, one-price-goes-anywhere universal postal service.”

Prime Minister David Cameron said: “Royal Mail operates in a competitive market, and right now being owned by the Government is a massive disadvantage.

“You can’t get out there, borrow money, access expertise and capital from the private sector.

“Effectively we are setting this business free to be able to do that, to respond to the competition.”

This is not the first time a Royal Mail sell-off has been proposed.

Lord Mandelson, the Labour business secretary, launched an attempt to part-privatise the Royal Mail in 2009, only to back down following opposition from the Communication Workers Union.

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