Westminster Outlook Selling shares in a service of national importance was always going to have some unpredictable outcomes. Already, the Government has been accused of undervaluing Royal Mail by about £1bn when it was floated in October, prompting fierce criticism from MPs and the National Audit Office. The Business Secretary Vince Cable and the Conservative sent to keep a close watch on him, Michael Fallon, probably expected those attacks. Harder to anticipate was that they would be the victims of a reverse shareholder spring yesterday at Royal Mail's debut full-year results as a listed business.
It's not often that companies put pressure on their own shareholders, but the crucial distinction here is that the state retains a 30 per cent stake. So the chief executive Moya Greene was rather turning the tables on her investors when she warned that the universal delivery service is under threat because of increasing competition from TNT Post.
Ms Greene said TNT can "cherry pick easy-to-serve urban areas" with "no defined quality standards" and has already started delivering in a few big cities. Royal Mail must deliver six days a week, and overnight, across the whole country.
TNT has complained that Royal Mail wants to raise "access charges", meaning it would cost more for TNT, and other rivals, to use Royal Mail's postmen to deliver letters to the door. This prompted a regulatory investigation, which Royal Mail argues is unfair as increases are a "commercial response to … the expansion of direct delivery competition".
Ms Greene wants Ofcom to undertake a full review of direct delivery. If that doesn't happen soon, she has told the Government that it must make a legislative amendment to force a review.
Mr Fallon always said privatising Royal Mail was about giving it the commercial freedom needed to secure the universal service. Ms Greene has dared him to prove that is indeed the case.