The traditional reason for flogging the service was that it was a financial basket case. Not any more.
If ministers get their way, our postal services will be sold off within a year. Details of the privatisation are taking shape: Goldman Sachs and UBS will be in charge of a consortium of investment banks providing advice in return for hefty fees (even if business minister Michael Fallon considers £30m “speculation”, his letter to this paper yesterday did not rule out the sum); provision has been made for postal workers to enjoy a £300m stake; and the Royal Mail’s chief executive, Moya Greene, is touring North America in the hope of rousing foreign buyers. Yet with the resolution of these second-order questions, the biggest one becomes harder to answer: why is the coalition flogging Britain’s postal network? The traditional reason for flogging the service was that it was a financial basket case. Not any more: annual profits are up over 60%. Last year’s whopping rise in stamp prices, and the dumping of the mail’s pension liabilities on the government books, means that the entity now looks enviably stable. So what would a sale add? Hawking a recovering organisation before the next election will not raise bumper sums for the Treasury. But it probably means that stamp prices will keep rising and the service will get worse (imagine what rural deliveries will be like come 2020). The management is right to talk about the need for investment – but this could be done now, simply by the mail borrowing. There’s no need for it to change hands. Privatisation of the mail increasingly looks like a policy without a purpose.