Leading article: Private capital, public interest at Royal Mail

Share
Related Topics

The part-privatisation of the Royal Mail, announced by the Business Secretary Vince Cable yesterday, needed to satisfy three objectives. First, it had to prevent a further deterioration in the quality of service upon which businesses and individual consumers rely. Second, it had to minimise job losses while guaranteeing staff pensions. And third, it had to protect the taxpayer from the possibility of another costly bailout, at a time of chronic public indebtedness. Mr Cable's plan, just about, managed to achieve all three.

No timeline for the sale has been announced (though we know it will not happen before next summer). But the plan does hold out the prospect of years of decline finally being reversed.

As part of the deal, the state will take over responsibilty for the Royal Mail's pension fund, which at present has a deficit of £8bn. But the pension black hole has not been the sole, or even the main, cause of the Royal Mail's woes.

The previous government's decision to allow private sector companies to compete in the business mail market since 2006 has hurt the Royal Mail's bottom line. A militant workforce, in full voice yesterday, has doggedly resisted the action needed to improve efficiency, whether in the form of modernising working practices or the amalgamation of mail centres. And overall mail volumes have been sliding thanks to the growth of email – and will continue to do so.

Radical action is required to meet these challenges. The private investors who will be invited to take a share in the business should be able to impose financial discipline and push through the necessary structural overhaul. If the universal service provision is maintained (as it should be), the Royal Mail can once again be synonymous with high quality service provision.

Mr Cable's announcement that the Post Office network, which is not included in the sell-off, might be mutualised, dovetails with wider Coalition objectives of promoting civic engagement and is welcome. So is the decision to offer Royal Mail staff 10 per cent of the shares in the newly-listed business.

Of course, part-privatisation is no panacea, as the struggles of the rail industry over the past 17 years have demonstrated. But when there is no alternative, as has been true of Royal Mail for many years now, the public interest lies in an infusion of private capital and management expertise. The question now becomes: who shall provide it?

React Now

Latest stories from i100
iJobs Job Widget
iJobs General

Science Teacher

£100 - £110 per day: Randstad Education Group: Key stage 3 and 4 Teacher requi...

RE Teacher

£120 - £162 per day: Randstad Education Hull: Teacher of Religious Education ...

A Level Chemistry Teacher

£120 - £162 per day: Randstad Education Hull: A Level Chemistry Teacher - Humb...

NQT Secondary Teachers

£100 - £130 per day: Randstad Education Hull: Randstad Education is actively r...

Day In a Page

Read Next
 

Letter from the Political Editor: Cameron's unexpected tax pledges give the Tories home advantage

Andrew Grice
President Barack Obama walks with U.S. Secret Service agents to Air Force One at Los Angeles International Airport in Los Angeles, Calif., May 8, 2014.  

Obama's Secret Service has become sloppy with its delusions of Hollywood grandeur

David Usborne
Italian couples fake UK divorce scam on an ‘industrial scale’

Welcome to Maidenhead, the divorce capital of... Italy

A look at the the legal tourists who exploited our liberal dissolution rules
Time to stop running: At the start of Yom Kippur and with anti-Semitism flourishing, one Jew can no longer ignore his identity

Time to stop running

At the start of Yom Kippur and with anti-Semitism flourishing, one Jew can no longer ignore his identity
Tom and Jerry cartoons now carry a 'racial prejudice' warning on Amazon

Tom and Jerry cartoons now carry a 'racial prejudice' warning on Amazon

The vintage series has often been criticised for racial stereotyping
An app for the amorous: Could Good2Go end disputes about sexual consent - without being a passion-killer?

An app for the amorous

Could Good2Go end disputes about sexual consent - without being a passion-killer?
Llansanffraid is now Llansantffraid. Welsh town changes its name, but can you spot the difference?

Llansanffraid is now Llansantffraid

Welsh town changes its name, but can you spot the difference?
Charlotte Riley: At the peak of her powers

Charlotte Riley: At the peak of her powers

After a few early missteps with Chekhov, her acting career has taken her to Hollywood. Next up is a role in the BBC’s gangster drama ‘Peaky Blinders’
She's having a laugh: Britain's female comedians have never had it so good

She's having a laugh

Britain's female comedians have never had it so good, says stand-up Natalie Haynes
Sistine Chapel to ‘sing’ with new LED lights designed to bring Michelangelo’s masterpiece out of the shadows

Let there be light

Sistine Chapel to ‘sing’ with new LEDs designed to bring Michelangelo’s masterpiece out of the shadows
Great British Bake Off, semi-final, review: Richard remains the baker to beat

Tensions rise in Bake Off's pastry week

Richard remains the baker to beat as Chetna begins to flake
Paris Fashion Week, spring/summer 2015: Time travel fashion at Louis Vuitton in Paris

A look to the future

It's time travel fashion at Louis Vuitton in Paris
The 10 best bedspreads

The 10 best bedspreads

Before you up the tog count on your duvet, add an extra layer and a room-changing piece to your bed this autumn
Arsenal vs Galatasaray: Five things we learnt from the Emirates

Arsenal vs Galatasaray

Five things we learnt from the Gunners' Champions League victory at the Emirates
Stuart Lancaster’s long-term deal makes sense – a rarity for a decision taken by the RFU

Lancaster’s long-term deal makes sense – a rarity for a decision taken by the RFU

This deal gives England a head-start to prepare for 2019 World Cup, says Chris Hewett
Ebola outbreak: The children orphaned by the virus – then rejected by surviving relatives over fear of infection

The children orphaned by Ebola...

... then rejected by surviving relatives over fear of infection
Pride: Are censors pandering to homophobia?

Are censors pandering to homophobia?

US film censors have ruled 'Pride' unfit for under-16s, though it contains no sex or violence