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.

Start your day with The Independent, sign up for daily news emails
Voices
Barn owls are among species that could be affected
charity appeal
Sport
After another poor series in Sri Lanka, Alastair Cook claimed all players go through a lean period
cricketEoin Morgan reportedly to take over ODI captaincy as ECB finally wield the axe
Life and Style
food + drink
Voices
John Profumo and his wife Valerie Robson in 1959
voicesWard committed no crime, and the truth is still being covered up, writes Geoffrey Robertson QC
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
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

Sheridan Maine: Commercial Finance Manager

Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Sheridan Maine: Regulatory Reporting Accountant

Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Ashdown Group: Marketing Services Manager - (communications, testing, DM)

£32000 - £35000 per annum + benefits: Ashdown Group: Marketing Services Manage...

Guru Careers: Finance Account Manager

£Neg. (DOE) + Excellent Benefits: Guru Careers: A Finance Account Manager with...

Day In a Page

Homeless Veterans appeal: 'You look for someone who's an inspiration and try to be like them'

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Could cannabis oil reverse the effects of cancer?

Could cannabis oil reverse effects of cancer?

As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

The Interview movie review

You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
Serial mania has propelled podcasts into the cultural mainstream

How podcasts became mainstream

People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
Jesus Christ has become an unlikely pin-up for hipster marketing companies

Jesus Christ has become an unlikely pin-up

Kevin Lee Light, aka "Jesus", is the newest client of creative agency Mother while rival agency Anomaly has launched Sexy Jesus, depicting the Messiah in a series of Athena-style poses
Rosetta space mission voted most important scientific breakthrough of 2014

A memorable year for science – if not for mice

The most important scientific breakthroughs of 2014
Christmas cocktails to make you merry: From eggnog to Brown Betty and Rum Bumpo

Christmas cocktails to make you merry

Mulled wine is an essential seasonal treat. But now drinkers are rediscovering other traditional festive tipples. Angela Clutton raises a glass to Christmas cocktails
5 best activity trackers

Fitness technology: 5 best activity trackers

Up the ante in your regimen and change the habits of a lifetime with this wearable tech
Paul Scholes column: It's a little-known fact, but I have played one of the seven dwarves

Paul Scholes column

It's a little-known fact, but I have played one of the seven dwarves
Fifa's travelling circus once again steals limelight from real stars

Fifa's travelling circus once again steals limelight from real stars

Club World Cup kicked into the long grass by the continued farce surrounding Blatter, Garcia, Russia and Qatar
Frank Warren column: 2014 – boxing is back and winning new fans

Frank Warren: Boxing is back and winning new fans

2014 proves it's now one of sport's biggest hitters again
Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

The Boy in the Dress: On set with the stars

Walliams' story about a boy who goes to school in a dress will be shown this Christmas