Every postal worker in Britain will be given around £1,500 of shares in Royal Mail when it floats on the stock market, the Business Minister will say today.
It will be the largest employee share scheme for 25 years with around 140,000 workers from postmen to local delivery office managers expected to scoop a windfall.
In his first speech on the controversial privatisation of the country’s postal service, Michael Fallon will today pledge to make the share handout ‘as attractive as possible.’
He is keen the share handout is structured in a way that all postal workers benefit, rather than just allowing the executives to walk away with millions.
But he will warn the militant postal union, the Communication Workers Union, that they must ‘engage’ with the Government - or the deal could be scuppered.
The CWU is bitterly opposed to the privatisation of Royal Mail, a deal which it fears will lead to price rises, pay cuts and the destruction of the service.
In a protest against the privatisation plans, the union is currently plotting to boycott the handling of any mail which has not been sent through Royal Mail, but one of its rivals, such as TNT.
Speaking at think-tank Policy Exchange today, Mr Fallon will call on the CWU to ‘put ideology aside’ so that their members ‘do not lose out.’ He will say: ‘I am determined to do the right deal for them.
‘Royal Mail employees spend their working lives making the post run on time, delivering to far flung parts of the country from Lands End to John O’Groats. They are absolutely central to the future success of the company.’
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Under the proposals, the Government has promised to give ten per cent of the company to its workers when it is privatised.
A stock market flotation is Mr Fallon’s preferred option, and a deal valuing the company at between £2billion and £3billion is expected to take place before April 2014.
Workers' windfall: The Communication Workers Union are opposed to the whole privitisation but Mr Fallon has told the union it must engage with the deal
But a major sticking point for the union surrounds whether the shares are given to postmen for free, or are sold at a discounted price.
In today’s speech, Mr Fallon is not expected to make clear which option is on the table. They should also get extra cash from the shares, known as a dividend, every six months.
He will say: ‘People should be in no doubt, whether the shares are discounted, or free, it is a hugely significant commitment from the Government to Royal Mail’s workers.’
Union bosses have already made clear their trenchant opposition to a deal which would require postmen to pay even a penny for the shares.
Billy Hayes, general secretary of the CWU, said: ‘The idea that postal workers are going to sell their soul for a ten per cent stake in the company is not going to work.
Union trouble: Frances O'Grady the General Secretary of the TUC has warned that privatising the Royal Mail would be a 'disaster'
‘Even less so if the Government expects postal workers to put up their own cash in order to buy shares.
‘Postal workers know that privatisation would mean the break-up of the company, more job losses, worse terms and conditions and attacks on their pensions.
‘It would be a wrecking ball to the industry they work in. Why would they sign up to that for a one-off share-scheme when their pay, conditions and job security for their rest of their career could be badly affected by the consequences?’
Anybody from families to pensioners will be allowed to subscribe for shares in the Royal Mail flotation.
It is too early to say how much they will cost or how many shares people will be able to buy in the company which has throughout its history had just one shareholder - the Government.
Royal Mail has been gearing up for privatisation for months, a deal which Margaret Thatcher refused to do saying she was ‘not prepared to have the Queen’s head privatised.’
Its £12billion pension black hole has been dumped on the taxpayer, and a first-class stamp has jumped from 46p to 60p after the regulator scrapped the limited on how much it can be increased each year.