Royal Mail: will sell-off force price of stamps up?

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After months of wrangling the Government has declared war on the unions and decided to float Royal Mail within a matter of weeks. Steve Hawkes looks at what the sell-off means for consumers and the industry.

There is little doubt Royal Mail needs the money a stock market sale of its shares will bring. Despite a mini revival under new chief MoyaGreene.

Royal Mail is facing huge pressure of maintaining a universal service, daily deliveries nationwide, at the same time as battling unprecedented competition from rivals and the digital age.

The size of the daily post bag has plunged in recent years as we revel in sending emails and instant messages on social networking sites.
Royal Mail has developed its parcels business and sees huge potential in facilitating the online shopping boom but for that it needs the external investment a flotation can bring.

Union chiefs are adamant the float is little more than a get rich quick scheme for a Government desperate to fix public finances and Royal Mail executives who stand to earn big money bonuses in a plc.

They fear life on the stock market will mean a further erosion of staff terms and conditions.

Ministers insist they have little choice, and will hope the offer of shares for posties, which will come with a regular annual payment, will help persuade workers to support the Government's argument of the need for change.

Critics fear the float could herald a big rise in the price of stamps and other services loved by millions for years as Royal Mail moves from state ownership to corporate entity.

There are already growing rumblings that the modernisation push within Royal Mail has brought with it a worrying drop in service standards with delivery times slipping to later in the day.

But chief exec Moya Greene has consistently argued that there is little in today's society available that offers as much value as delivering a letter to a friend or family member anywhere in the UK for 60p. Royal Mail adds that regulatory controls on stamp prices will remain in place.