In his Budget statement last autumn George Osborne wrong-footed Ed Balls by taking credit in his figures for the forthcoming 4G auction of telecom spectrum, and being able to claim as a result that the deficit was falling. Mr Balls had prepared his speech on the basis that the deficit was going to rise.
In the event the auction raised less than predicted and the deficit is rising rather than falling. But the trick got Mr Osborne through a difficult afternoon at the office and with another one looming with the Budget next Wednesday I would not be surprised to see him try something similar, but this time with the privatisation of Royal Mail. It could be worth around £3bn to the public purse so the temptation is obvious.
Less obvious is how successful the business has become. I had dinner last Monday with Moya Greene, the chief executive hired from Canada to turn Royal Mail around, and was startled to learn that so much progress has been made that the enterprise might well be ready to be privatised as early as this autumn. It can even claim to be a growing business and the hook for investors is that internet shopping is causing a boom in the home delivery of parcels, which offsets the decline in traditional letters.
In addition junk mail – or marketing communications to use a more polite term – is also booming apparently because it still delivers much better response rates than any internet-based advertising. One should add for the peace of mind of those who see privatisation as a double edged sword that Royal Mail no longer includes the post offices. They have been hived off and will be dealt with separately – according to Ed Davey probably via a co-op style mutual ownership deal.
It is also interesting how in an age when business people relish the limelight Moya Greene is largely unknown. She runs one of the biggest businesses in the country but has one of the lowest profiles, content to let results speak for themselves. One suspects, however, that relative anonymity will disappear as the sale process gathers momentum.