Riven by strike threats and parcel chaos, Royal Mail is no longer delivering

This is a significant escalation in the company’s efforts to push through reform. It is the equivalent of holding the feet of workers to the flames, a message of defiance that says: “If you insist on standing in the way of change then we will set the best part of the business free and cast the bad bit adrift.”

But it is also a high-stakes gamble that could backfire. The rationale for the separation is that continuing losses at its main postal arm is dragging down the more profitable overseas division. 

Without what the company describes as “significant operational change” in the UK, Plan B is a carve-up that would protect the group’s “value and prospects”, it says.

The logic is reasonable enough, but a break-up would be costly and time-consuming, and there is no guarantee that it would provide the dramatic transformation that Royal Mail seeks. It reeks of panicked corporate finance alchemy – the last desperate roll of the dice from a company running out of time and ideas. 

Analysts doubt a standalone GLS could compete with Amazon and others. What would become of the legacy UK arm without the “cross-subsidies” of its pluckier corporate sibling? Presumably, it would still be required to meet its obligations to deliver six days a week under the universal service obligation. 

The proposal also presumes that the CWU would allow such an extreme measure to take place, which seems inconceivable. Indeed the general secretary Dave Ward wasted little time in branding the threats “pathetic”, calling on Royal Mail’s board to “consider their futures” and warning that “not a single postal worker will budge until you give them a dignified, proper pay rise”. 

What if ultimately the union chiefs call the company’s bluff? Is it prepared to fire the gun on a complex corporate dismembering act? Either it’s a good idea or not, and if it is, then the board should get on and do it regardless.

With the two sides now further apart than ever, it is hard to see how the summer’s most bitter industrial stand-off can be resolved at all, never mind sensibly or amicably.