ACCORDING to its latest accounts, the Royal Mail is losing almost £2m a day. The need for reform is self-evident. Without change, the business will sink into oblivion.

Both managers and postal workers accept the need for modernisation. It is regrettable that negotiations between both sides on what form that modernisation will take has brought the Royal Mail to the brink of a catastrophic industrial dispute.

A strike could well have sounded the death knell for the Royal Mail, a much loved and respected national institution. There would have many private firms only too willing to exploit the unrest and snatch business away for good.

In the modern communications industry, the Royal Mail has managed to retain customers because of loyalty borne out of its tradition. In future, that loyalty cannot be taken for granted and will have to be earned.

Unless it grasps the nettle of competitiveness, the Royal Mail as we know it will struggle to survive.

It is blessing for all concerned, therefore, that members of the Communication Workers Union voted against industrial action over a pay offer linked to a change in working practices.

Royal Mail executives must resist the temptation to claim victory in the dispute.

Their inclination to celebrate must be tempered by the narrowness of the majority against strike action.

While the vote marks a reversal for the union leadership, it does not represent a vote of confidence in the management and the modernisation plans.

If the Royal Mail is to retain its market and restore its profitability, there needs to be a unity of purpose.

The creation of a consensus has not been helped by the disclosure of bonuses and 'golden hellos' paid to certain Royal Mail executives at the same time as they are talking about the need to reduce the number of employees.

The onus on both sides is to come up with an agreement which meets both the necessity for reform and the genuine concerns postal workers have for their future.