Royal Mail
The historic organisation is to be sold-off by the government (Reuters)

The chief of the Communications Workers Union has alleged that the government's decision to privatise the Royal Mail is down to cronyism.

"This isn't about what's best for the Royal Mail, it's about vested interests of government ministers' mates in the City," said general secretary of the CWU Billy Hayes.

His reaction followed the news that the Royal Mail will be floated on the London Stock Exchange within weeks.

The government confirmed to the markets its intention to launch an initial public offering for the postal service and said it would keep flexible the total stake offered out to retail investors because it wants to balance market conditions, investor demand, and value for taxpayers.

It had already been announced to parliament in July that the government planned to privatise Royal Mail through an IPO, but this is the first formal step towards flotation.

Chuka Umunna MP, Labour's Shadow Business Secretary, also disagreed with the move and declared that the sale was "politically-motivated".

"This is taking place despite opposition from a huge coalition including the Conservative Bow Group, the Countryside Alliance, the National Federation of Subpostmasters, the cross party BIS Select Committee as well as Royal Mail employees themselves," Umunna added.

"The government has not addressed the huge concerns which remain on the impact the Royal Mail sale will have on consumers, businesses and communities, but ministers are ploughing on regardless."

But Vince Cable, the Business Secretary who has overseen the decision, argued that the floatation was important for the Royal Mail, its employees and its customers.

"These measures will help ensure the long-term sustainability of the six-days-a-week, one-price-goes-anywhere universal postal service," said Cable.

The move also attracted praise from the business community.

Simon Walker, Director General of the Institute of Directors (IoD), stressed: "Royal Mail employees should see this as a great opportunity, not only to own a stake in their company, but also to give it the best chance to succeed in a competitive delivery market.

"The unions must acknowledge that strike action is not in the best interests of the business or their members."

London