LONDON – Britain's Royal Mail, whose origins date back to the reign of Henry VIII, is to be sold off to private investors, the government announced Thursday, setting up a bitter battle over the selling of a national icon.
Even former Prime Minister
But the Conservative-led government says that letting go of the Royal Mail is an idea whose time has come as officials try to shrink the public purse in an age of austerity.
Never mind that previous administrations have floated the idea before and abandoned it in the face of vociferous public opposition, or that postal employees have already been planning to vote on a strike over working conditions and pensions. The government of Prime Minister
“It’s one of Britain’s biggest businesses. It turns over 9 billion pounds [$14.2 billion], employs 150,000 people and delivers the mail six days a week right across the United Kingdom,” Michael Fallon, the business minister, told the
"This is a decision that will have significant impact on consumers, businesses and communities up and down the country," Labor spokesman Ian Murray told lawmakers in the House of Commons. "The government is playing politics with the queen's head, and should think again before it's too late."
The Royal Mail traces its lineage back 500 years, to the appointment of a Master of the Posts in 1512 by Henry VIII. In 2012-13, the service collected and delivered 15 billion letters and packages across Britain, from the white cliffs of Dover in southeast England to the Outer Hebrides far off the coast of western mainland Scotland.
Analysts say the Royal Mail could be worth more than $5 billion. Both institutional and individual investors will be eligible to buy shares, and 10% will be set aside for employees.
Fallon told the House of Commons that the service has run a loss in five of the last 12 years.
"It's now going to be able, for the first time, to properly access the markets and raise the money it needs to invest in the future," Fallon said in his interview with the BBC. "Because it's part of the public sector, it's not able to borrow money. It has to compete against schools and hospitals. There are investors out there who are ready and able to invest in this business."
But the union representing postal workers called the privatization plan "a breach of the public's trust."
“This is simply about dogma from old-fashioned