Morning:
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Today's plan to part-privatise Royal Mail has all the makings of another QinetiQ. That was the arrangement under which the then state-owned business was seen to be in need of an injection of management talent from US private-equity group Carlyle as a prelude to it being sold off.
Carlyle bought about a third of the business and tripled its money in less than two years. It is a moot point whether it did anything to the business or added anything the existing management could not have done, and at much less cost to the taxpayer. Certainly, the National Audit Office was unconvinced.
Royal Mail obviously has problems, because email and texting have killed what was left of the letter-writing habit. But it has not been helped by a half-baked competition policy that allowed competitors to come in and cherry-pick the choicest bits of the traffic without taking on the public-service obligations - and still have the Royal Mail do the costly home delivery bit for them. So the efforts by the business to improve efficiency and cut costs were negated by the loss of volume and revenue as the choicest bits went elsewhere. And this was a policy designed to help Royal Mail get back on its feet.
Meanwhile, the pension fund has such a vast deficit it has sucked up much of the cash that would otherwise have paid for more modernisation. No business, public or private, could flourish with that round its neck. Foreign postal services such as Deutsche Post and TNT may now be more efficient than ours, but are we really comparing like with like, and is it remotely realistic to think they can come in and transform the business?
Outgoing chairman Allan Leighton and chief executive Adam Crozier favour partial privatisation, but they always have because they saw it as the only way they could escape endless interference from Whitehall - and no doubt privately rather hoped it might improve their chances of getting some share options and bonuses.
Both think they are pretty good managers. Perhaps they should explain what is so difficult it requires a foreign firm to come in to show them how to do it. Or is it simply that, once ostensibly private, management will take brutal decisions politicians will not tolerate when it is wholly owned? In which case, why should taxpayers have to foot the bill for ministerial cowardice?
What makes the privatisation proposal totally shameless, though, is that, as part of any deal, the burden of the pension fund, with its deficit running into billions, will be transferred to the taxpayer. The cost of this obligation will be so huge it will dwarf the funds raised by the partial sale.
This means the Government is in fact proposing to pay someone to take the Royal Mail off its hands, and it ought to have the courage to admit it. It could also admit that if the money the pension fund needs was instead diverted into the business, it would pay for enough investment to transform Royal Mail's prospects.
So this proposed deal just does not make sense. If there are good reasons for it, they have not been made public so far.
Private line on public pensions
The Royal Mail pension deficit is such bad news one suspects that Lord Mandelson will be in trouble with his boss for drawing unnecessary attention to it. Nevertheless, it is only a tiny part of the wider public-sector pension problem which Government also prefers not to talk about.
However, by piecing together various reports just laid before Parliament, pensions consultant John Ralfe - who has an uncanny knack of being right about these things - notes that liabilities for the civil service scheme rose by 40% in the three years to last March, and estimates conservatively that this liability plus the costs of education and health service pensions comes to at least £750 billion.
But there is more. Using the Freedom of Information Act, Ralfe asked the Treasury if it had ever sought advice on whether Government could legally default on these pension obligations. The answer - astonishingly - was that it has. But, claiming legal privilege, it refuses to say what the advice was.
