Five questions answered on the plans to sell Royal Mail

How have the workers reacted? What about the Post Office?

Today, Business Secretary Vince Cable announced that the government will sell Royal Mail. We answer five questions on this latest decision.

How will Royal Mail be sold?

The government will sell off shares in Royal Mail through flotation on the stock market. Employees will also be given 10 per cent shares in the business, which Cable described as "the biggest employee share scheme for nearly 30 years".

It is thought the sale will value the business at £2-3bn.

What has been the reaction to this news?

Mixed. Members of the Communication Workers Union (CWU) are opposed to the privatisation and have even threatened strike action. 

Workers are said to be deeply suspicious of the idea of a share scheme, according to the CWU, which represents about two thirds of the 150,000 workforce.

Business Minister Michael Fallon, writing in The Daily Telegraph, has said that now is the right time to sell Royal Mail.

Chuka Umunna MP, Labour's shadow business secretary, has said the government is opting for privatisation to "dig the Chancellor, George Osborne, out of a hole of his own making".

What else has Cable said?

"The Government’s decision is a practical, legal and commercial decision to put Royal Mail’s future on a sustainable basis," Mr Cable told MPs.

 "Now the time has come for government to step back and allow management to focus wholeheartedly on the business. This government will give Royal Mail the real commercial freedom it's needed for a long time.

"It cannot be right for Royal Mail to come cap in hand to ministers each time it wants to invest and innovate. The public will always want government to invest in schools and hospitals ahead of Royal Mail."

How well is the Royal Mail currently doing?

The postal service is currently undergoing a facelift, which involves focusing more on parcels and less on letters.

A boom in parcel delivery, largely due to internet shopping, helped Royal Mail more than double its profits last year after years of losses.

Does the sale include the Post Office?

No. The post office is a separate company to Royal Mail. The Post Office is the national network of branches that offer postal, governmental and financial services. Whereas Royal Mail sorts and delivers letters and parcels.

Royal Mail vans pictured parked at a Post Office depot in east London. Photograph: Getty Images.

Heidi Vella is a features writer for Nridigital.com

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Why Angela Merkel's comments about the UK and US shouldn't be given too much weight

The Chancellor's comments are aimed at a domestic and European audience, and she won't be abandoning Anglo-German relationships just yet.

Angela Merkel’s latest remarks do not seem well-judged but should not be given undue significance. Speaking as part of a rally in Munich for her sister party, the CSU, the German Chancellor claimed “we Europeans must really take our own fate into our hands”.

The comments should be read in the context of September's German elections and Merkel’s determination to restrain the fortune of her main political rival, Martin Schulz – obviously a strong Europhile and a committed Trump critic. Sigmar Gabriel - previously seen as a candidate to lead the left-wing SPD - has for some time been pressing for Germany and Europe to have “enough self-confidence” to stand up to Trump. He called for a “self-confident position, not just on behalf of us Germans but all Europeans”. Merkel is in part responding to this pressure.

Her words were well received by her audience. The beer hall crowd erupted into sustained applause. But taking an implicit pop at Donald Trump is hardly likely to be a divisive tactic at such a gathering. Criticising the UK post-Brexit and the US under Trump is the sort of virtue signalling guaranteed to ensure a good clap.

It’s not clear that the comments represent that much of a new departure, as she herself has since claimed. She said something similar earlier this year. In January, after the publication of Donald Trump’s interview with The Times and Bild, she said that “we Europeans have our fate in our own hands”.

At one level what Merkel said is something of a truism: in two year’s time Britain will no longer be directly deciding the fate of the EU. In future no British Prime Minister will attend the European Council, and British MEPs will leave the Parliament at the next round of European elections in 2019. Yet Merkel’s words “we Europeans”, conflate Europe and the EU, something she has previously rejected. Back in July last year, at a joint press conference with Theresa May, she said: “the UK after all remains part of Europe, if not of the Union”.

At the same press conference, Merkel also confirmed that the EU and the UK would need to continue to work together. At that time she even used the first person plural to include Britain, saying “we have certain missions also to fulfil with the rest of the world” – there the ‘we’ meant Britain and the EU, now the 'we' excludes Britain.

Her comments surely also mark a frustration born of difficulties at the G7 summit over climate change, but Britain and Germany agreed at the meeting in Sicily on the Paris Accord. More broadly, the next few months will be crucial for determining the future relationship between Britain and the EU. There will be many difficult negotiations ahead.

Merkel is widely expected to remain the German Chancellor after this autumn’s election. As the single most powerful individual in the EU27, she is the most crucial person in determining future relations between the UK and the EU. Indeed, to some extent, it was her intransigence during Cameron’s ‘renegotiation’ which precipitated Brexit itself. She also needs to watch with care growing irritation across the EU at the (perceived) extent of German influence and control over the institutions and direction of the European project. Recent reports in the Frankfurter Allgemeine Zeitung which suggested a Merkel plan for Jens Weidmann of the Bundesbank to succeed Mario Draghi at the ECB have not gone down well across southern Europe. For those critics, the hands controlling the fate of Europe are Merkel’s.

Brexit remains a crucial challenge for the EU. How the issue is handled will shape the future of the Union. Many across Europe’s capitals are worried that Brussels risks driving Britain further away than Brexit will require; they are worried lest the Channel becomes metaphorically wider and Britain turns its back on the continent. On the UK side, Theresa May has accepted the EU, and particularly Merkel’s, insistence, that there can be no cherry picking, and therefore she has committed to leaving the single market as well as the EU. May has offered a “deep and special” partnership and a comprehensive free trading arrangement. Merkel should welcome Britain’s clarity. She must work with new French President Emmanuel Macron and others to lead the EU towards a new relationship with Britain – a close partnership which protects free trade, security and the other forms of cooperation which benefit all Europeans.

Henry Newman is the director of Open Europe. He tweets @henrynewman.

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