The government has now sold its final stake in Royal Mail completing the privatisation process. Since December 2013 public owned stakes have been gradually sold off with the final 13% being sold at 455p a share.
This final sale has raised the government £591.1m which it claims will go towards lowering the country’s national debt. Since the privatisation process began almost 2 years ago the government has received approximately £3.3bn from selling off Royal Mail.
The selloff has not been without controversy. During the initial sale at the end of 2013, shares were sold at 330p. The value of the shares were widely criticised as undervaluing the worth of Royal Mail, and a government report in 2014 discovered that a stronger share sale price could have netted a further £180m for the government. The original flotation price was claimed to be 30p lower than what it could have realistically achieved, as demand from the banking sector and individuals was greater than expected. Royal Mail’s share price as of Thursday morning came in at 449.90p.
While the public now has no stake or ownership in Royal Mail, the sale has provided employees of the business a 12% stake. Yet the Communication Workers Union has been left severely disappointed that the public no longer have a vested interest in safeguarding our mail delivery service. Dave Ward, CWU general secretary stated “The remaining government share in this profitable company should have been used to safeguard the public's voice in Royal Mail and ensure the continuation of daily deliveries to every address in the country”.
However, the government maintain that privatisation was in the best interests for all parties involved. Chancellor George Osborne said “This is a milestone moment in the long and proud history of the Royal Mail, when we secure its long-term future. By fully leaving state ownership we have a win all round - for customers, the workforce and the taxpayer.”
There is fear that a privately owned Royal Mail could result in loss of services to remote areas of the UK, and the 6 day delivery service being reduced. But Royal Mail were quick to calm these fears by insisting it was dedicated and “committed” to delivering post to all homes and businesses in the UK.