After Royal Mail, ministers might adjust their set on selling Channel 4

 

The criticism levelled at Vince Cable over the botched Royal Mail flotation this week might have an unlikely consequence. No, it won’t claim the Business Secretary’s scalp because in a delicately balanced Coalition Cabinet, the Liberal Democrat is too big to fail.

But as the former City minister Lord Myners prepares a report on how privatisations could be better handled in the future to avoid more mishaps, what doesn’t need to be sold probably won’t be.

The remaining state shares in Lloyds are still likely to be offloaded before the election, and Royal Bank of Scotland will follow at a distance as making it ship-shape is a longer job. In both instances, the companies are listed, so the market is already saying what it thinks they are worth; there is no opportunity to fix a low issue price that appears to disregard investor appetite, as with Royal Mail.

What is interesting is that up to this point, talk of a Channel 4 privatisation had been getting louder. It may even get a mention in the Tory manifesto for the election. But there isn’t much point in pursuing a Channel 4 sale from a financial point of view; it might raise a billion or so after fees. The ideology behind the transaction is that commercial entities belong in the private sector, not that they are great fundraising exercises.

Royal Mail wasn’t about the money either. It was about creating something commercially viable from an organisation that was a drag on the state as emails replaced letters. For all the criticism that Mr Cable cost us a billion pounds, what is often forgotten is Royal Mail’s pension fund liability – quietly serviced by the taxpayer at a cost of around £400m a year.

The difference with Channel 4, its fans say, is that it isn’t a drag on anyone. Its status as state-owned and advertiser-funded is the perfect blend. Yet that hasn’t stopped the privatisation chatter. Benefits Street and Gogglebox aside, the broadcaster must work harder to demonstrate its unique difference, how it keeps the BBC honest, and why it shouldn’t be tampered with. Its defenders say that with the American broadcaster Viacom snapping up Channel 5, a sell-off of Channel 4, with the risk of it falling into overseas hands, would be a catastrophe for Britain’s cultural landscape.

And after the second-class Royal Mail delivery, ministers might decide against the risk of another giveaway anyway.

Burberry’s chief can do as he pleases, as long as he’s good

 Big money has always been in fashion at Burberry. And that’s been fine while its stock market performance has been stratospheric. But due to emerging market wobbles, some of that growth is now firmly in the rear-view mirror. It means that the pay package for the chief executive Christopher Bailey is either gruesome excess or the spur that takes the fashion house on to the next level.

Either way, the City isn’t keen, as yesterday’s bloody nose demonstrated. Investors follow tight strictures on how remuneration should be put together. Outliers are not welcome. But what the dual pay vote – where shareholders have a say on a company’s pay report and pay policy – actually does is blunt the effect of a rebellion. It creates a consequence-free channel for investors to vent their spleen without actually sending the company back to the drawing board.

What might Mr Bailey be worth to a rival? How much does he need to be prevented from turning tail to set up a fashion house of his own? Burberry has always behaved as if it were too cool for the stock market and the rules that it employs.

Outliers can do what they like – until they stop outperforming. Sir Ken Morrison was no fan of non-executive directors until the abortive Safeway acquisition showed why his supermarket group needed better governance. Apple – where Mr Bailey’s predecessor, Angela Ahrendts, has gone– was happy to husband its giant mountain of cash until fears of slowing growth finally persuaded it to pay a dividend.

Burberry has every justification to cock a snook at the best-practice brigade. But Mr Bailey had better be every bit as good as his fat pay package says he is.

The weather can’t dampen a venture born out of tragedy

Staying in fashion, I chaired a discussion the other night in which Rob Forkan, the co-founder of Gandys Flip Flops, talked eloquently and openly about how his company was born from tragedy. Its trendy footwear has harnessed social media, captured celebrity fans and the support of Sir Richard Branson and Sir Philip Green. A portion of its profits funds children’s homes in developing countries. Yet Gandys might not have been set up by Mr Forkan and his brother, Paul, if they hadn’t lost their parents in Sri Lanka in the tsunami of 2004.

There is nothing more powerful than grief to give someone a sense of mission. Coupled with that, Mr Forkan contends with the same challenges faced by most entrepreneurs: supply problems, competitive pressures and the best way to grow the business. Despite this summer’s soggy turn, he is confident that most weather is flip-flop weather. He was even more relaxed when I suggested that his footwear might one day slip out of fashion. Instead of broadening out to sell clogs, there are other brand extensions on the way. With the 10th anniversary of the tsunami a few months off, Gandys is a venture that deserves to thrive.

Voices
On the last day of campaigning before the polling booths open, the SNP leader has written to voters in a final attempt to convince them to vote for independence
voicesIs a huge gamble on oil keeping the First Minister up at night?
Life and Style
techApple has just launched its latest mobile operating software – so what should you do first?
Arts and Entertainment
tv

Arts and Entertainment
Rosalind Buckland, the inspiration for Cider with Rosie died this week
booksBut what is it like to be the person who inspires a classic work of art?
PROMOTED VIDEO
Arts and Entertainment
The former Doctor Who actor is to play a vicar is search of a wife
film

Matt Smith is set to join cast of Jane Austen classic - with a twist

News
A male driver reverses his Vauxhall Astra from a tow truck
newsThe 'extremely dangerous' attempt to avoid being impounded has been heavily criticised
Arts and Entertainment
Lionel Messi in action for Barcelona
filmWhat makes the little man tick?
Arts and Entertainment
tvReview: An undercooked end (spoiler alert)
News
i100
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Pharrell dismissed the controversy surrounding
musicThe singer said 'the last thing I want to do is degrade'
Sport
Cesc Fabregas celebrates his first Chelsea goal
footballChelsea vs Schalke match report
Arts and Entertainment
Toby Jones (left) and Mackenzie Crook in BBC4’s new comedy The Detectorists
tvMackenzie Crook's 'Detectorists' makes hobby look 'dysfunctional'
Life and Style
fashion

Olympic diver has made his modelling debut for Adidas

News
i100
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Property Underwriter

£70-90,000: Saxton Leigh: Our client a London Market Insurer are seeking a Pro...

Operational Risk Manager - Asset Management

£60,000 - £80,000: Saxton Leigh: Our client is an leading Asset Manager based...

Trainee Recruitment Consultant Birmingham

£18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week