The sell-off of the Royal Mail has been an extraordinary success, with 700,000 people applying for shares. The Royal Mail’s staff do not seem to share the revulsion expressed by trade unions: just 0.24 per cent of the 150,000 staff opted out of the share deal. State control is being replaced by mass ownership, and a company that has been in and out of losses for years will now become a new FTSE100 giant. It is a remarkable achievement.
• The Coalition government obtained an independent valuation of the shares which put the sale price at between 260-330 pence. The shares are being floated at the top end of the valuation range, and whilst trading is brisk today we should wait to see where the shares level out at. Crucially the Royal Mail now has the capacity to invest for the future. That investment was simply not possible when the country has been so broke by our debt crisis. I should stress that the Royal Mail is different to the Post Office, wghich is not part of this process. Labour closed over 5000 post offices. We have started reopening them.
• The offering was seven-times oversubscribed, and small investors have been favoured over large ones. The 35,000 who applied for more than £10,000 - around 5pc of the total- will receive nothing. Each member of the public, around 690,000, will receive the minimum allocation of £750, no matter how many they applied for. Royal Mail employees who applied for shares via the Employee Priority Offer will have their applications met up to £10,000. They now have a stake in their own business.
The BBC are asking whether this service will continue as a 6 day a week delivery. I raised this exact point in parliament in September:
Guy Opperman (Hexham, Conservative)
My constituents in Northumberland want a six-days-a-week universal service, but with incentives and shares for staff, and want Royal Mail to have the commercial freedom to invest, innovate and compete with online and other providers. Will the proposal address the problems that successive Governments have failed to address over successive decades?
Michael Fallon (Sevenoaks, Conservative)
Yes, I believe it will. It will give Royal Mail the chance to face its future not just with confidence but with access to capital markets and the commercial freedoms it needs to respond to new opportunities, particularly in a rapidly growing parcels market.
It is worth noting that social democratic countries like Belgium and Germany have privatised their royal mail service and have benefitted hugely with the freedoms, investment and opportunities available. Their services are going from strength to strength.
The final point is this: Labour opposed the sale and want to buy Royal Mail back, even though they tried to privatise it 5 years ago. This would be more taxpayer money to be spent on a service that has repeatedly struggled when state run. It again would have to be bought back using taxpayers money.
