Royal Mail staff to be given free shares

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Postal workers are to receive free shares in the Royal Mail, under privatisation plans announced by Business Secretary Vince Cable.

Mr Cable told the Commons on 10 July 2013 that 10% of free shares will be set aside for existing staff when the sale takes place.

The flotation of Royal Mail on the London Stock Exchange could raise between £2bn-£3bn.

Labour reiterated its opposition to the proposals, claiming the government had failed to justify the sale.

In a statement to the Commons, the business secretary said the "time has come for government to step back from Royal Mail".

He said the sale would give the company "the tools to compete and be a successful enterprise".

Mr Cable told MPs the universal service and the six-day service would be protected, insisting these commitments could only be changed by Parliament and not by shareholders.

But shadow business secretary Chuka Umunna said Royal Mail should be kept in public ownership to give taxpayers "an ongoing direct interest in the maintenance of universal postal service".

He argued: "It helps safeguard the vital link the Royal Mail has with the Post Office and it ensures the taxpayers get a share in the upside of modernisation and increased profits which Royal Mail delivers.

"Despite this, the government has pressed on regardless with this sale and failed to adequately justify why it must sell now."

Tory Sir Edward Leigh attacked Labour's position. He said he tried to privatise Royal Mail 20 years ago as Post Office minister but told MPs the plans did not get off the ground because of Labour "intransigence".

"They were wrong then they were wrong now," he said.

The deputy leader of the Liberal Democrats, Simon Hughes, said the 2010 coalition agreement stated that the majority interest in Royal Mail would be retained by the government and its employees, with only an "injection of private capital".

"That's what I support, I do not support a majority sale," he said.

At prime minister's questions earlier that day David Cameron said there would be widespread public support for the government's plans.

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