The Secretary of State for Business, Innovation and Skills (Vince Cable)
On 10 July, I laid a report in Parliament and made a statement, Official Report, column 361, setting out the Government’s plans to float Royal Mail shares on the London Stock Exchange via an initial public offering (IPO) during this financial year.
Today, the Government have made a formal intention to float announcement for listing Royal Mail on the premium segment of the official list and the main market of the London Stock Exchange.
Shares will be made available to institutions, members of the public—through intermediaries or direct application to Government—and 10% of the shares will be allocated to eligible employees free of charge through an employee share scheme. Government are delivering on the commitment to employees that Parliament made two years ago, and this will be the largest employee share scheme of any major privatisation for almost 30 years.
Our announcement provides additional detail about the retail offer and the employee priority offer further to my July report. It also highlights Royal Mail’s performance, strengths and strategies.
The sale will be the final stage of the Government’s reforms of the postal sector which are designed to ensure the maintenance of the universal postal service—the six day a week, one price goes anywhere service that we have enshrined in legislation. Changes to the universal service’s minimum requirements, which include free services for the blind and services to urban and rural areas alike, can only be changed by affirmative resolutions in both Houses of Parliament. Moreover, any changes to the uniform nature of the service would require new primary legislation.
We have already relieved Royal Mail of its historic pension deficit and put in place a new regulatory regime with greater protections for the universal postal service.
A sale will give Royal Mail real commercial freedom and enable it future access to private sector capital so that it can invest in the business, innovate and act quickly to take advantage of new opportunities such as those that exist in the e-fulfilment market.
The Post Office is separate from Royal Mail plc and is not for sale. This Government are committed to the Post Office’s sustainable future and we have committed to no programme of Post Office closures. Government are providing funding of £1.34 billion over four years to maintain a network of at least 11,500 branches and ensure that 90% of the population live within one mile of a Post Office outlet. This is the largest investment in the Post Office’s history and will also enable the modernisation of up to 6,000 branches.
I have placed a copy of the intention to float announcement in the Libraries of both Houses.