Second-class Royal Mail

EACH day, it seems, brings fresh evidence that Vince Cable – in spite of his crowd-pleasing remarks to last month's Liberal Democrat conference – can offer little alternative to the benefits of the free market.

Fresh from performing a U-turn on bringing competition to universities, the Business Secretary is now pressing ahead with plans to privatise the Royal Mail. However, on this, as has been painstakingly explained to protesting trade unions, there really is no alternative.

Indeed, the recent history of the Royal Mail is an object lesson in why governments cannot be trusted to manage postal services. Starved of investment, lacking in up-to-date automation and devoid of sensible business strategies, the Royal Mail was in no position to deal with the downturn in business caused by the growth of new, electronic forms of communication, a downturn made even worse by the recession.

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Add the threat of competition from far more efficient postal operators elsewhere in Europe, and the crisis of Royal Mail's 8bn pension deficit, and it should be clear that drastic action is long overdue.

Mr Cable, however, still has much work to do to convince the doubters, some of which are in his own party. And as well as union opposition, there remains much understandable disquiet among the public. Post offices, after all, help to unite communities and the postal service provides a lifeline for remote regions of rural Britain.

The Business Secretary is doing his best to dispel concerns, however. He has made it clear that the coalition Government will not make the mistake of its Labour predecessor in closing down sub-post offices. Indeed, the Post Office itself is not part of the planned sell-off. And the promise that at least 10 per cent of shares will go to employees should go a long way towards galvanising the support of Royal Mail staff.

Mr Cable may not believe that capitalism has all the answers, but on this occasion at least, he has to demonstrate that it offers the only hope of saving Britain's postal service.