A good idea to sell Royal Mail to its staff? Answers on a postcard to Sir George Bain

Amid the melŽe of Thursday’s attempted bomb attack on London, an announcement slipped out almost unnoticed from Alan Johnson, the Secretary of State for Trade and Industry, concerning Royal Mail. Mr Johnson, himself a former postie, told the Commons that he had appointed Professor Sir George Bain ‘to support me in working on Royal Mail issues’.

This is a long way short of the full-blown inquiry into the future of Royal Mail, chaired by an independent business figure, that we had been led to expect. There was no formal statement from the department about Sir George’s appointment and no information about how precisely he would support Mr Johnson, much less anything resembling his terms of reference.

But Mr Johnson did say one thing of significance, which is that while privatisation of Royal Mail has been ruled out, employee share ownership most certainly has not. The 100-odd Labour backbenchers who have signed an early-day motion demanding that Royal Mail remains 100 per cent publicly owned fear that an employee share trust would be the thin end of a very fat wedge, leading inexorably to privatisation by the back door and part ownership of the organisation by external investors. Mr Johnson expressed surprise that his fellow Labour MPs should have jumped to such a rash conclusion.

What Royal Mail will be interested to discover are the conclusions at which Sir George will arrive as he endeavours to ‘support’ Mr Johnson. The important thing to remember about Sir George, a Canadian who once ran the London Business School, is that he is a safe pair of hands. As chairman of the Low Pay Commission, he came up with a rate for the national minimum wage which kept the unions reasonably happy without scaring the pants off business. As a reward, he was given the chairmanship of another DTI taskforce looking into how employers could devise more family-friendly working hours for workers with children. Now his services have been hired for a third time.

It would be unfair to suggest that Sir George has been told what the solution for Royal Mail is and then asked to work his way back to the problem. But with full postal competition due to arrive in less than six months, a pounds 2.5bn pension deficit around its neck and the regulator Postcomm proposing a tough new set of price caps for Royal Mail, the organisation could do with a workforce motivated to the maximum degree. What better way than by giving each of the 160,000 staff a share in the business? More suggestions on a postcard to Sir George.