UK Royal Mail Staff may be offered shares

Royal Mail wants to offer shares to its employees as part of a drive to broaden the organisation’s ownership in a move that has raised union fears about a potential sell-off.

Allan Leighton, the chairman, said yesterday that he wants to change Royal Mail’s ownership in the next stage of the development of the group, which has just moved into profit. Although he emphasised that a new structure would be dominated by employee ownership, he also gave warning that the famous Warwick agreement between unions and Labour, which includes a pledge that Royal Mail would remain in public ownership, is not binding on the company.

In an interview with The Times he said: “I am determined to get more ownership in some way or form into the hands of our people. I want a broader ownership but that must be dominated by the employees.”

He added: “I am not fazed by Warwick. Warwick was an agreement between the unions and the Labour Party. In my experience it is the shareholders and the management that decide the future of a business. Warwick can’t be binding on the company.”

In response to recent mounting concern about service standards, Mr Leighton also said he would change the structure of executive bonuses so that half of the awards would be based on service standards.

Royal Mail is expected to include new plans for ownership and other changes to the business as it sets out a fresh five-year programme to the Department of Trade and Industry shortly. Mr Leighton said there would be “twice as many changes in the next three years as in the past three.”

The organisation is close to the end of a three-year renewal plan which aims to produce operating profits of £400 million and trigger a payout to all employees of up to GBP1,000. The chairman believes the bonus payment will trigger an appetite for greater ownership by the 160,000-strong workforce.

Unions warned Mr Leighton that Labour’s pledge on public ownership would be fought for. Billy Hayes, general secretary of the Communication Workers Union, said: “Our agreement is with the Government and unless Allan Leighton is more powerful than Tony Blair we are content to stick with our agreement.”