UK Government Moves to Sell $3bn Slice of Royal Mail

17 December 2008

LONDON: The UK's Royal Mail is in line for part-privatisation. The shock move, which bears the thumbprint of the recently enobled secretary of state for business Lord Peter Mandelson (pictured), is likely to result in more than one third of the loss-making service falling into private hands.

According to the rightist Daily Telegraph – which was scarcely able to stifle its glee – two companies are in competition for the stake, for which the asking price is said to be circa £3 billion ($4.58bn; €3.35bn).

One contender is the now privatised Dutch state postal service TPG, which would control any Royal Mail stake via its express delivery unit TNT. The other is believed to be to be Deutsche Post's package courier service DHL.

Lubricating the deus ex machina toward this politically desired end was a report by political gofer Richard Hooper, a former BBC producer with close links to government, more recently deputy chairman of communications regulator Ofcom, and seen as a safe pair of hands.

His report claims that new minority owners can offer the "confidence, experience and capital" needed to carry out vital changes – a bold, if rash, statement in these troubled times when governments worldwide are acting as crutches to private enterprise.

Hooper also describes the Royal Mail's current position as "untenable", claiming that its 'universal service' [a one-price delivery system to anywhere in the British Isles, no matter how remote] is under threat without "modernisation".

Some observers believe, however, that a 'universal service' will lurch even faster into the trashcan of history if outright control of Royal Mail eventually falls into private hands – an almost inevitable outcome. 

As the French say: "The only way to boil a live frog is very, very slowly"

Data sourced from and BBC Online (UK); additional content by WARC staff