The Royal Mail – a tough sell

Some day soon – unless the coalition has already lost its bottle – a bill will be introduced to ‘part-privatise’ Royal Mail. It has to be done. But it will be a tough sell, for four reasons.

First, the market for the Royal Mail’s product is shrinking. It’s a big fish, but its pool is getting smaller. It carries 75 million letters a day, but that’s down by 10 million just in the last five years. And 87 percent is mail sent by businesses. Apart from Christmas cards, the rest of us now correspond by email. Last year’s pre-tax loss was £262m: the reality is that the business is insolvent.
 
Second, the Royal Mail is decrepit. It is up to 40 percent less efficient than some other EU mail systems which machine-sort all the letters and parcels (here it’s done by hand). And it is carrying a £10 billion deficit on its vast pension scheme.