UK Royal Mail shares proposal attacked
Plans by the Royal Mail to offer its workers a stake in the company are being opposed by almost half of Labour MPs, including allies of Gordon Brown, the chancellor, raising the prospect of a parliamentary clash over the issue in the new year.
Some 160 Labour MPs have signed a Commons motion urging the government to hold on to all shares in the Royal Mail and stick by a general election manifesto commitment to keep it in public hands.
On Tuesday, Allan Leighton, Royal Mail chairman, said he was optimistic of securing government approval for his plan to give a fifth of the company’s shares to its staff.
He told the trade and industry select committee that it would be “very straightforward” to set up a share ownership scheme for employees of the postal services operator.
The shares, distributed equally to employees, could be traded via a trust, Mr Leighton suggested. But the scale of Labour MPs’ opposition to any dilution of state ownership poses a significant hurdle to his plan.
Alan Johnson, trade and industry secretary, is giving serious thought to the proposal but has not yet made a decision. His thinking will be influenced by a report from Sir George Bain into the Royal Mail’s future that is expected to be completed shortly. There is no commitment to publish the report.
The motion welcomes the “commitment” in Labour’s election manifesto that there are no plans to privatise the Royal Mail.
It goes on to urge “the Royal Mail and the government to agree a business plan which is in line with the commitment given in the general election manifesto and which provides for a successful, publicly-owned Royal Mail with all shares continuing to be owned by the government”.
The Department of Trade and Industry has already said privatisation is not on the agenda. But the Communication Workers’ Union, which represents postal workers and opposes any change in the ownership structure, has been lobbying Labour MPs over its concerns. It believes that Mr Leighton wants an “emp-loyee buyout” as a first step towards an eventual part or full privatisation of the Royal Mail.
Peter Kilfoyle, a former defence minister and one of the Labour signatories, said: “The Royal Mail is totemic. It is probably the oldest public service. It doesn’t belong just to the employees. It belongs to the country as a whole.”
Any change to the shareholder structure would require parliamentary ap-proval. Among Labour backbenchers who have exp-ressed their concern are other former ministers, including Janet Anderson, Frank Dobson, Frank Field and Clare Short.
The list of signatories extends well beyond the party’s habitual rebels to include loyalists and some known supporters of the chancellor, such as Ian Austin, the newly elected MP for Dudley North and a former adviser to Mr Brown.
