Unite has slammed the Royal Mail for feathering the nests of shareholders at the expense of staff and consumers after the firm, privatised in 2013, announced this week (January 17) a property deal worth £22m.
The latest chunk of land the Royal Mail is to sell off measures less than an acre and will be developed into luxury flats by Galliard Homes, a property developer known for building up-market housing. Only one quarter of the 262 flats to be built will be “affordable” – defined as anything below 80 per cent market rate – but the majority will be for the very wealthy. One-bed room flats in the immediate area are up for sale for more than £1m, according to the Daily Mirror.
Royal Mail is now refusing to disclose the book value of the latest plot of land it sold, which covers the area where the company owned a mail centre site in Vauxhall, south London.
In 2017, the company flogged off land part of its Mount Pleasant sorting office in 2017 to property developers Taylor Wimpey for £193m.
In the last few years, the Royal Mail has made in excess of £400m from its central London land sales, which Unite fears will only benefit shareholders, instead of being invested in the business to improve the service and benefit costumers.
After all, despite poor financial performance – the company’s pre-tax profits tumbled by more than half in November – the Royal Mail continues to deliver eye-popping dividends to its shareholders. Since privatisation, pay-outs to shareholders have exceeded £1bn, with a record £213m delivered in 2017 alone.
Only 20 per cent of shares are owned by Royal Mail workers and small investors – the majority of the firm is controlled by large investors such as fund manager Black Rock, which last year was slated to receive a £13m pay out.
Commenting on the latest land sale, Unite national officer for the Royal Mail Louisa Bull said, “This is another example of the Royal Mail entering into the luxury property market. I am not sure that was the intention of minsters when the Royal Mail was privatised at a knock-down price in 2013.
“In this latest sophisticated version of ‘Monopoly’, it is the shareholders who will benefit, when any profits should be invested in improving services for businesses and consumers, as well as seeing that a dedicated workforce have good pay and employment conditions,” she added. “We need greater transparency from the Royal Mail bosses on their property ‘wheelings and dealings’.”
News of the latest Royal Mail property deal comes amid controversy over the new CEO Rico Back’s ‘golden handshake’ worth an astonishing £5.8m, and the outgoing CEO Moya Green’s departure deal totalling £2.7m. Last year, Royal Mail shareholders voted by 70 percent against the remuneration policy – thought to be one of the biggest revolt in shareholder history.
Labour MP Rachel Reeves who chairs a committee which investigated the pay-outs slammed Royal Mail management for handing out such eye-watering sums.
“Royal Mail failed to consider any alternative to Rico Back as their new chief executive and splashed out £5.8m on breaking his contract, a sum that could have hired 252 postmen and postwomen,” she said in October.
“We heard that no UK tax was paid on this astounding multimillion-pound deal, a sum paid for by UK customers as they post their letters and parcels, and an amount which would appal postmen and postwomen and the wider public.”
The financial and reputational woes now engulfing the Royal Mail have underscored the failure of privatisation – research from the New Economics Foundation and campaign group We Own it has found that by just 2025, only 10 years after the Royal Mail was sold off, the taxpayer will be worse off than had it remained public.