Coalition confirms Royal Mail sell-off The coalition has confirmed plans to sell off a majority stake in Royal Mail in a stock market flotation in the current financial year, kicking off Britain's most ambitious privatisation for two decades. Vince Cable, business secretary, said Royal Mail's 150,000 UK employees would be eligible to get a 10 per cent stake free at the time of the initial public offering. He told the House of Commons on Wednesday this would create the largest employee share scheme of any major UK privatisation for almost 30 years. Staff would not be able to sell the shares for at least three years. Mr Cable also confirmed that members of the public would be able to buy shares through a retail offer. This is not expected to include an aggressive marketing campaign like the "Tell Sid" adverts of the 1980s for shares on British Gas. The size of stake to be sold has yet to be fixed. The government said the decision would be influenced by market conditions, investor demand and its overall objective to get value for money for the taxpayer. The flotation is thought likely to value Royal Mail at £2bn-£3bn, making it the most ambitious privatisation since that of the railways in the 1990s. Mr Cable said: "The key objective of our reforms to the postal market is to protect the one price goes anywhere, six days a week service that businesses and communities throughout the country rely upon. To do that Royal Mail needs future access to private sector capital because the postal market is changing; the number of letters we send is declining, while the number of parcels is growing as online shopping becomes more popular. Royal Mail is competing with other postal operators, as well as the internet, smartphones and tablets. But Royal Mail in the public sector had its hands tied in a way competitors in the UK and elsewhere in Europe did not, he said. 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. Alongside the offer to institutional investors, the public will have the option to buy shares through stockbroking accounts or direct from the government. Royal Mail employees will also have the option to buy additional shares through the retail offer. Eligible employees will be given priority when those shares are allocated. The planned sale follows failed efforts to privatise, at least partly, the world's oldest postal service under Conservative and Labour governments over two decades - though Margaret Thatcher balked at selling Royal Mail, saying she was "not prepared to have the Queen's head privatised." The government believes the state-owned delivery service needs access to private capital to invest as it continues to change into a parcel-focused business fit for the age of internet shopping. The Communication Workers Union, which represents three-quarters of Royal Mail's 150,000 staff, has threatened rolling strikes this autumn if it does not receive legally binding assurances about future terms and conditions. However, there is a question over how keen its members are on a conflict, which has yet to be tested in an industrial action ballot. The CWU hopes the threat of unrest will scare off institutional investors and force the collapse of the sell-off. It has proposed an alternative "not-for-dividend" model, based on Network Rail, whereby Royal Mail would stay in the public sector but have access to capital markets, with profits reinvested. Goldman Sachs, UBS, Barclays and Bank of America Merrill Lynch have been appointed the lead banks on the flotation, supported by Investec, Nomura and RBC. The Labour party called the privatisation a "fire sale" and said it was not in the interest of taxpayers, consumers and small businesses who rely on the service. Chuka Ummuna, shadow business secretary, said: "Ministers are pushing ahead with a fire sale of Royal Mail to dig the chancellor - who is borrowing £245bn more than he planned - out of a hole of his own making." The Royal Mail is one of the largest of a new wave of state assets, including part of the government's student loan book and a stake in Urenco, the uranium enrichment company, that are all up for sale.