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Don't abandon Royal Mail plans

Evening Standard comment
05.05.09

As the horse-trading begins over the future of Royal Mail, more is at stake than just the embattled Prime Minister's authority.

Mr Brown urgently needs to head off a Commons rebellion over Lord Mandelson's proposed partial privatisation of the service if he is to reassert his grip over his party.

But the Post Office will still be with us when Mr Brown is long gone. It should not be treated as a political football.

The rise of email, payment of benefits into bank accounts and changes ordered by the EU competition authorities have shrunk its business. It desperately needs new capital in order to modernise.

Jobs have to go to get costs down - but the heavily-unionised workforce has a long history of industrial action. Meanwhile, the public simply wants a Post Office that works.

Successive governments have shirked the hard decisions that are necessary to keep Royal Mail competitive. The Conservatives fought shy of a privatisation that could have closed many rural post offices. But that is no excuse for failing to modernise effectively now.

The Government is reportedly considering an alternative ownership structure like that of Network Rail, a not-for-profit company without private shareholders.

That, however, would be a bad precedent. The Network Rail board is a committee of 110 faceless individuals supposedly representing industry and users but in fact far too unwieldy to offer effective leadership. At Royal Mail, such a board would never be able to take the hard decisions now needed to modernise.

Part-privatisation, probably involving a sale to TNT, formerly the Dutch post office, would at least bring in new management skills. If that solution is ditched because Mr Brown has to appease a few backbenchers, we will all be the losers.

Heathrow doubts

Never again can it be claimed that the whole of the business world wants a third runway at Heathrow. A group including the chief executive of Sainsbury's, Justin King, and Carphone Warehouse founder Charles Dunstone, has stated in an open letter that the benefits of the third runway are unproven, while the environmental effects would be damaging. They urge ministers to abandon the plan and concentrate on high-speed rail services.

This newspaper has always believed Londoners would pay a high price in terms of increased noise, emissions and traffic congestion from a third runway, while service could be improved by more competition between airports.

Runway capacity could be freed up if flights to Paris and Brussels, already well served by rail, were reduced. Likewise, rail services to domestic destinations should be improved to reduce the need for internal flights.

The business case for a third runway always had more to do with the profits of BAA and BA than the needs of the economy as a whole.

Some now claim links between some of the letter-writers and the Conservatives, who plan to cancel the third runway. The fact remains, however, that proponents of expansion have not yet made a clear economic case. Ministers should think again.

London pride

Most Londoners will surely agree with the Mayor's verdict on TripAdvisor's negative comments about London - "baffling". A survey conducted by the US travel website claims to find London dirty, badly dressed and the worst in Europe for food.

Can they be talking about the same city we live in? London's vast range of restaurants and the excellence of the best draws plaudits even from New York; its role as a capital of fashion is internationally acknowledged.

The online whingers are outnumbered: more than 26 million people visited the capital last year. London is the most vibrant and dynamic city in Europe - and the world knows it.

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