Vince Cable confirms sale of Royal Mail

Vince Cable, the business secretary, has today confirmed that the UK government will look to push through a sale of Royal Mail before the next election. It is believed that the government will try to sweeten the deal with a promise that employees and local communities will be able to apply for discounted shares in the flotation although this is unlikely to pacify unions who are steadfastly against the sale of Royal Mail.

At the same time the government has also confirmed that it will retain the Royal Mail pension fund which is currently running a deficit of over £10 billion. In effect it will be UK taxpayers bailing out the pension fund deficit as a means of making the proposed sale of Royal Mail seem more attractive to the masses. The truth is that Royal Mail has failed to keep up with new technology and new working practices in the worldwide postal market. As a consequence, a number of competitors have shown their hands over the last few years and the company is struggling to maintain market share in some of its most lucrative arenas.

If, as many expect, the operation is floated off in part or in all this is likely to lead to significant job cuts as the company transfers from public ownership to private ownership.