Hundreds of postal workers in Huddersfield will be handed free shares as part of a controversial privatisation of Royal Mail.
They will be among 35,000 employees across the North and up to 150,000 UK-wide to be gifted 10% of the new company under the £3bn sell-off, which will begin over the next year.
Business Secretary Vince Cable said: “These shares will be free to eligible employees, recognising that many of them would otherwise find them unaffordable.”
Mr Cable said the final proportion of Royal Mail to be sold would depend on market conditions, although it would be a majority stake.
The shares will be available to the general public as well as institutional investors under the terms of the initial public offering.
The Government hopes that the offer of free shares to staff – who will also get priority if they want to buy more – will ease vehement opposition to the privatisation being led by the GMB union.
Mr Cable told the Commons: “This is logical, it is a commercial decision designed to put Royal Mail’s future on to a long-term sustainable basis.
“It is consistent with developments elsewhere in Europe where privatised operators in Austria, Germany and Belgium produce profit margins far higher than the Royal Mail, but have continued to provide high-quality and expanding services.
“Now the time has come for Government to step back from Royal Mail, allow its management to focus wholeheartedly on growing the business and planning for the future.”
The company will be listed on the London Stock Exchange by the end of the financial year, he added.
Labour’s Chuka Umunna said the Government had failed to provide any justification for acting now.
“Having nationalised the organisation’s debts by taking on its pension liabilities, they now want to privatise the profit at the very time it is making money. How on earth does that make any sense?” he said.
The National Federation of SubPostmasters joined unions in condemning the plan, saying the Government was taking an “utterly reckless gamble” with the future of the post office network by going ahead with plans to sell Royal Mail.