Bain seeks to end pain at Royal Mail

In his new role as chief Government adviser on Royal Mail, Sir George Bain has broad industry support. But he has his work cut out as critics of pricing in proportion keep up the pressure. Jessica Phillips reports

Two weeks ago, Alan Johnson, Secretary of State for the Department of Trade & Industry (DTI), raised a few eyebrows by announcing that Canadian-born Sir George Bain would assist ministers with key postal issues.

He had been expected to call an independent review of Postcomm's proposal to open up the market to competition ahead of the rest of Europe.

This week, however, Bain appears to be riding a wave of overwhelming support from the postal sector. A Communication Workers Union spokesman comments: "The Government has clearly recognised that there needs to be a more honest appraisal of Postcomm's proposals."

It is a sentiment echoed by Institute of Practitioners in Advertising head of direct marketing David Payne: "Postcomm's actions are significant, and, while Postwatch is doing a great job, there is a need for the Government to oversee key decisions.

"For instance, there are concerns about the amount of money needed to communicate pricing in proportion to the public."

Bain, a former principal of the London School of Business (1989 to 1997), and ex-president and vice-chancellor of Queen's University Belfast (1998 to 2005), was responsible for the introduction of New Labour's flagship minimum wage. He will now examine the relationship between Royal Mail and its regulators and unions.

According to a DTI spokesman, Bain is to "ensure a strong working partnership between them, to see a successful, publicly owned Royal Mail restored to good health".

He will start in September, with the spokesman explaining: "This [job] needs to be done ahead of the challenges of liberalisation."

Reporting directly to Johnson, a former postman, Bain is to advise a Select Committee of MPs who have been chosen to scrutinise Postcomm's key decisions (PM last week). The role has no official timeframe, but the market is set to open on January 1, giving Bain just four months to work his magic.

An expert in industrial relations, his most notable achievements include chairmanships of the Low Pay Commission between 1997 and 2001. He is currently chairman of the DTI's Work & Parents Taskforce, as well as a non-executive director of Bombardier Aerospace Shorts Brothers, the Canada Life Assurance Company, and Electra Investment Trust.

Born in Winnipeg, western Canada, he comes from a family of trades unionists. It was this background that led him to study industrial relations, which he has pursued since arriving in the UK in 1963.

Bain will be diving head first into the row over Royal Mail's privatisation, as MPs thrash out the topic in Parliament. But for a man who only two years ago was favourite to head Postcomm, he is familiar with the ins and outs of the industry.

A Postwatch spokesman says: "We look forward to helping Bain. It would aid clarity if his terms of reference were available, together with an idea of the timetable he is working to." The body would like to see Bain publish a full report into Royal Mail's operations.

Although the DTI has said the role is purely advisory, Nigel Stapleton, chairman of Postcomm, claims the industry is still in the dark about the extent of Bain's remit: "We're happy to engage in any dialogue with him. We expected some kind of review, so weren't surprised by the appointment. Although it isn't clear at the moment whether this is a review, or if he will be just advising ministers."

Stapleton also laughs off suggestions that Bain is treading into the regulator's territory: "Clearly, there are differences of opinion between us and Royal Mail with regard to how consumers are rewarded, as opposed to its shareholders. But his appointment hasn't made us nervous. We're proceeding with our programmes leading up to January 1."

He continues: "The only thing that can alter our plans is a change of legislation, and there's absolutely no sign of that happening. The way the appointment was announced leads me to believe that Bain is able to get involved in any issue concerning Royal Mail. We'll work with him in any area he wants."

Paul Carvell, chief executive of market entrant UK Mail, is growing weary of market reviews, and asks: "Is this the one that will set the scene for the future? The review to end all reviews, so we can get on with it?"

For its part, Royal Mail states: "The immediate future is exceptionally challenging. We need both investment and efficiency, not one or the other. We need to be able to cover our costs through sensible and flexible prices.

"It will cost #2bn to equip the company to offer 21st-century services, after a decade of under-investment."

Over to you, Sir George.