ALEX BRUMMER: If Royal Mail wants to future-proof itself, it must tackle its boss's pay and pensions arrangements

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As Britain's most recently privatised utility, the Royal Mail is very much in the sights of Jeremy Corbyn – with some of the group's militant, unionised workforce among those favouring state ownership.

But there must be real questions as to whether a Labour government, which plans to stretch public finances to breaking point by issuing bonds in water and electricity to compensate private sector owners, would find the resources to push ahead with the £1.8billion investment unveiled yesterday.

Much of this funding is aimed at re-creating the abandoned second delivery service for parcels bought online. The investment will include two new hub warehouses.

The downside for investors is that the modernisation programme, which builds on the knowledge of chief executive Rico Back at European operation GLS, comes at a price.

The dividend is to be cut by 40 per cent next year, or as companies like to say, 'rebased'.

All dividend cuts hurt pension funds and the like but in Royal Mail's case it hits workers, each of whom was allocated shares at privatisation, as well as 'Sids' who subscribed to the share offer.

Together they occupy up to 20 per cent of the share register.

If Royal Mail wants to future-proof itself, Rico Back's pay and pensions arrangements will need to be rebased after a huge investor revolt last year. Some 70 per cent of investors voted Back's remuneration down.

He brings very poor credentials to defending the free market, having demanded a £6million golden hello, and because of his living arrangements.

He may be the only postie in history who could afford to commute from his home in Zurich to work.

Such insensitivity is red meat for Corbyn, Shadow Chancellor John McDonnell and their acolytes when it comes to making the case for renationalisation.

Modernisation of parcel services is a good way forward, with demand for letter deliveries forecast to fall by 26 per cent over the next five years.

That's a slower decline than in most countries. But if the universal postal service is to remain intact there will be more first class stamp price rises to come.