More than one elephant in the Royal Mail sorting room

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IT’S NOT hard to identify the biggest of the elephantine threats to Royal Mail’s imminent stock market listing, which heralds the most contentious privatisation since the 1980s.

With unions poised to ballot members over the prospect of industrial action within weeks, the prospect of a multi-day walkout at the precise time that the company’s shares begin trading will instil pricing discipline uppermost in the minds of the bookrunners.

Yet it is not only the prospect of imminent strike action that will concern Moya Greene, its chief executive, as government advisers apply the finishing touches to the listing documents.

Among other, longer-term, threats to Royal Mail is one of which many investors may be entirely unaware: that the company’s ability to set the price of first-class stamps does not exist in perpetuity.

Ofcom, the media regulator, has granted the company a licence to do so until 2019, but a review of the existing regime is scheduled to begin well ahead of that date.

Noises emanating from the Labour conference in Brighton this week suggested that pricing freedom could be a primary target for a Miliband government. It is not only the big energy companies which have reason to fear the arrival of an increasingly left-leaning Labour leader in Downing Street.

Short of the torture of full renationalisation, there are few policy measures that would augur more portentously for a privatised Royal Mail, particularly after its promise to establish a progressive dividend policy attracted a stream of interest from retail investors.

The obvious conclusion? Royal Mail might be as much an electoral issue in 2020 as two years from now.