R M privatisation is being delivered behind closed doors

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It is strange that with the sale of the postal service just months away the public has no idea of the details of the sell-off

Dennis Skinner's annual heckle at the state opening of parliament this year was a rallying cry for all those who worry about the little-discussed but imminent sale of Royal Mail.

Bolsover's finest chose the occasion of the Queen's speech to highlight plans to privatise her head. That particular aspect is perhaps symbolic but the wider impact of this privatisation will be anything but. Even his nemesis Lady Thatcher was loth to sell what many see as part of the fabric of our society and servant to our communities.

Desperate to reassure the public that selling this successful public-sector enterprise will be in our interest, the government, in the shape of Michael Fallon, the industry minister, has used all the powers he has at his disposal to "protect" what is called the universal service provided by Royal Mail.

But those protections are not enough and will certainly not endure. Despite the promises, it will not be possible to guarantee a privately owned business will want to (or be able to) maintain six-days-a-week collection and delivery services throughout the country. With the cost of most stamps now deregulated, the only restraint on rocketing prices is the vague argument of "market forces". One just needs to look at their energy bill to see how the impact of those market forces is working in that regard.

All of this adds up to a major concern for those who value or indeed rely upon the services provided by Royal Mail. As with many public services, those who most need the daily visit from the postie are the most likely to suffer from its disappearance. Older people are the first to stop sending letters and cards when stamp prices rise. Small businesses are very sensitive to price rises for packets and parcels.

Yet for the economics of this sale to work, the new owner will need to cut costs ruthlessly, particularly lossmaking rural services. While that might not be an immediate prospect, it will certainly be the long-term objective and something the owner will be able to do with little or any restraint.

The Save Our Royal Mail campaign has been established to highlight the threats posed by this stealthy privatisation. In the past, governments have been keen to trumpet the disposal of state assets. Telling Sid was perhaps a high point in that regard. With Royal Mail privatisation the opposite is true. The government seems very shy, preferring to use its consultants and bankers to sell the business to institutional investors behind closed doors. I do not recall the prime minister once defending the policy.

Even so, it is strange that with a sale only a few months away we still have no idea how much of Royal Mail will be sold – and perhaps more importantly – to whom. We know that private equity investors are running the rule over the books. This is particularly concerning, as their business model is well established: buy company, strip costs, maximise value, sell on. To make that prospect more likely the legislation passed to allow this sale makes the taxpayer responsible for any lossmaking rump that might be left behind once the value of the business has been stripped out.

Some argue that letters are a product of a bygone age, rendered obsolete by electronic communications. While letter volumes are in decline, the services provided by Royal Mail are as vital as they have always been. What enables Royal Mail to deliver from Land's End to John o' Groats for a single, affordable price is the huge growth in parcel and packet delivery, another by-product of e-commerce.

All of that is now under threat. The only upside is perhaps in the future we might be able to get Dennis Skinner's head on a first class stamp.