View from the House: Royal Mail needs shake-up

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Oct 6 2009 By Ian Taylor, MP for Esher and Walton

WE VALUE the proud heritage of the Royal Mail, but preserving and enhancing the organisation requires a long overdue shake-up.

This issue has been made more important by years of ducking the challenges faced by the postal service, which has led to a patchwork of interim measures with a continuation of Victorian practices and inefficiency.

It is of concern that those opposing re-structuring do not acknowledge that the strength of Royal Mail is being sapped, not just by competition or the loss of frustrated major customers, but by the arrival of the digital age. Indeed, many of the pleas urging me to resist the plans have come via email.

Part-privatisation would allow the private sector to bid for a 30 per cent stake in the letters and parcels business.

The eventual investor will need to provide an injection of vital expertise and know-how as well as money, so the candidates may well be from other countries which have made similar moves more expeditiously.

The investment will be matched by the transfer of Royal Mail's enormous pension liability to the taxpayer, so removing a real deadweight from the business.

At the same time a new fund will be established to protect the Royal Mail's universal service obligation, which guarantees deliveries to virtually every address in the country.

The most important issue for most people is maintaining the capability to send mail anywhere in the country for the same price - a commitment which must be secured.