OVER the last few weeks there have been a number of articles which question the rationale behind the privatisation of Royal Mail.

Let me provide some context. In recent history, Royal Mail’s core mails business has swung between profit and loss. It has suffered losses in five of the past 12 years, a period which has seen overall losses of around £1 billion and the loss of over 50,000 jobs.

Thanks to the hard work of Royal Mail’s management and workforce, as well as action taken by this Government, Royal Mail is now profitable. However, the challenge we face is to maintain this positive momentum.

A share sale will give Royal Mail the commercial freedom and future access to capital that a company of its size needs. It cannot be right for a £9 billion a year business to come cap in hand to ministers each time it wants to innovate or commit future investment.

And it cannot be fair for the Government to give Royal Mail taxpayers’ money ahead of schools and hospitals, or to increase public borrowing.

Royal Mail needs access to private capital to adapt to new technology and to exploit new markets. It needs this capital so it can continue modernising and take advantage of opportunities such as the huge growth in online shopping, building on its success in parcels and logistics.

Although Royal Mail’s performance has improved, its profit margin lags well behind international competitors such as Deutsche Post, Austrian Post and Belgian Post. As part of the public sector, Royal Mail has its hands tied in a way its competitors do not.

So the sale of shares in Royal Mail is a practical, logical and commercial decision by Government. And let me reiterate that after privatisation, Royal Mail will still provide the oneprice- goes anywhere, six-days-aweek universal postal service which is part of the social and economic fabric of our country.

This includes services to urban and rural areas and free services to the blind. These obligations cannot be altered unless the 2011 Postal Services Act is changed – they are fully protected, irrespective of ownership.

This Government wants a Royal Mail that is financially secure and better able to compete, but still provides the universal service that consumers and businesses rely on.

Through the sale of shares we will protect the ethos that is rightly valued but we will allow Royal Mail finally to have the freedom, like any other major company, to access the capital and investment it needs to secure its long term future.

Rt Hon Michael Fallon, MP, Minister of State for Business and Enterprise