Royal Mail rightly has a special place in public affection as an essential part of Britain ’s economic and social fabric. The iconic red – and glittering Olympic gold - pillar boxes and the one price goes anywhere universal postal service are an important part of our heritage. But as with all institutions, if we are to preserve Royal Mail for the long term then it needs to change to keep with the times.
That’s why the government is implementing a package that Parliament enshrined in the Postal Services Act 2011 to ensure that it is successful over the long term. We’ve already reformed the regulatory regime and removed Royal Mail’s historic £10bn pension liability. The final step is to give Royal Mail access to the private capital so that it can innovate and invest. The Coalition is clear that 2013-4 is the year that this should happen.
Royal Mail is one of Britain ’s biggest businesses with a turnover approaching £9bn. It is ridiculous to deprive it of the same access to capital that other large businesses enjoy so it can make the investment necessary to seize new market opportunities. With the huge deficit we inherited, it’s simply not tenable for any government to prioritise scarce public capital for Royal Mail over schools and hospitals. There has been much speculation that we have decided to sell shares via an IPO. While this is a potentially attractive option the government remains open minded about what the best approach would be. I meet both management and the CWU regularly to discuss the sale.