Who owns Royal Mail? Who is postal service’s biggest shareholder, name explained and why is it on strike?
Royal Mail staff members have been taking part in a series of strikes over pay and working conditions
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Chief Executive of Royal Mail, Simon Thompson blamed the industrial action for the redundancies, stating: “Each strike day weakens our financial situation.”
Over 115,000 employees have taken part in strike action since August, with further strikes planned for October and potential strike action to hit the upcoming the holiday season. So who owns Royal Mail and why are they striking? Here’s everything you need to know.
What is Royal Mail?
Royal Mail is the UK’s postal service. It was established half a century ago by King Henry VIII in 1516 after the King appointed a courier to the role “Master of the Posts”.
Originally created to send the King’s correspondence, it was first made available to public citizens by King Charles I in 1635 with the person who received the letter being left to foot the bill.
During the Puritans the service was disbanded, before being officially reestablished after the restoration of the monarchy by Charles II in 1660.
Throughout the centuries the service has adapted, changing its name to the office of “Postmaster General” in 1710. The iconic red pillar boxes were established in 1852 and have become a national symbol.
Why is it called Royal Mail?
Royal Mail gets its name from its original purpose, which was to send royal documents to and from the King or Queen of England.
Who owns Royal Mail?
Royal Mail was traditionally a public service that was managed under a government department, however in 2011 the government passed the Postal Services Act, which gave the green light for 90% of Royal Mail to be privatised, whilst 10% remained with Royal Mail employees.
In 2013, Royal Mail was floated on the London Stock Exchange for the first time in its 500-year history. Addressing parliament, then business minister Vince Cable said: “The government’s decision on the sale is practical, it is logical, it is a commercial decision designed to put Royal Mail’s future on a long-term sustainable business.”
The government initially kept 30% of Royal Mail’s shares, however in 2015, under Chancellor George Osbourne, these were sold off, severing ties and putting the British institution into private hands.
Who is Royal Mail’s biggest shareholder?
The company’s biggest shareholder is Czech billionaire Daniel Křetínský who controls the group Vesa Equity Investment. The group who previously owned 22% of the Royal Mail’s shares has increased this stake to 25%, which led to the government issuing a review to determine if it would be a matter of national interest.
Křetínský who also has stakes in Sainsbury’s and West Ham United became the largest shareholder at Royal Mail in 2020. The 46-year-old billionaire is known for keeping a low profile and has not commented publicly on the issue.
Why is Royal Mail striking?
Royal Mail strikes began in August, with more action scheduled to take place on Thursday 20 October and Tuesday 25 October. Potential national distribution strikes may also occur across November and December, directly impacting the holiday season.
More than 115,000 staff members have walked out due to disputes over pay and working conditions. The action comes after the Communication Workers Union (CWU) and the government undertook three months of talks, with no resolution resolved.
Speaking about the decision to strike CWU general secretary Dave Ward said: “Nobody takes the decision to strike lightly, but postal workers are being pushed to the brink. There can be no doubt that postal workers are completely united in their determination to secure the dignified, proper pay rise they deserve.
“We can’t keep on living in a country where bosses rake in billions in profit while their employees are forced to use food banks. When Royal Mail bosses are raking in £758 million in profit and shareholders pocketing £400 million, our members won’t accept pleads of poverty from the company.”
What has Royal Mail said about the redundancies?
Royal Mail has announced redundancy plans for over 6,000 staff members by next August. Reported by the BBC, Royal Mail’s Chief Executive Simon Thompson said: “This is a very sad day. I regret that we are announcing these job losses. We will do all we can to avoid compulsory redundancies and support everyone affected.”
He added: “Each strike day weakens our financial situation.The CWU’s decision to choose damaging strike action over resolution regrettably increases the risk of further headcount reductions.”
Whilst the Communication Workers Union (CWU) General Secretary, Dave Ward, hit back describing the announce as: “the result of gross mismanagement and a failed business agenda of ending daily deliveries, a wholesale levelling-down of the terms, pay and conditions of postal workers, and turning Royal Mail into a gig economy style parcel courier”.