Royal Mail: What will happen in the aftermath of the sale?

When Vince Cable announced that the Royal Mail was set to be privatised, fears were raised over how the Post Office would be affected as a result. Thus, Cable's announcement was followed by widespread firefighting by the government to allay fears that the Post Office was set to go the way of the trains, with ever-increasing fares and relentless profit-hunting to sate the shareholders.

Perhaps most confusingly about the Royal Mail sale, it split politicians but not just down the left-right divide. Some of those on the left who would typically be expected to fight such privatisation broke ranks and offered their support. Similarly, certain right-wing MPs who may have been seen as supporters of such a scheme rallied against it.

This, of course, made the affair a largely confusing one and meant that it was increasingly difficult to forecast what would happen as a result of the sale. There are, however, two opposing views of what could be on the horizon in a post-privatisation world.

The pro-

Cabinet ministers from both the Conservative and Liberal Democrat parties have claimed that an IPO would have little to no impact on the Post Office as it is currently viewed by the British public. To qualify this, MPs noted that the Post Office and Royal Mail were actually separated as two distinct entities back in April of last year. Thus, selling off of the Royal Mail would - theoretically - leave the Post Office untouched.

Staying with the separation, an agreement was signed at the time that included a pledge that each will work together for at least the next decade.

Last of all, Cable claimed that, amid fears that a privatisation would do away with the current six-day service, the opposite would actually be more accurate. He said the current system is unsustainable without huge public investment, so gaining money from the private sector would likely make the six-day service a reality for much longer.

The anti-

Despite Cable's argument that private money would extend the six-day service, those against a privatisation have called this a somewhat myopic view. They argue that the government has actually only pledged to continue this "universal service obligation" until 2022. Thus, beyond this date there could be sweeping changes that directly contrast what was initially promised.

They believe that new owners will then campaign to cut this incredibly expensive service down to the much more cost-effective system of just running between Monday and Friday. Whilst cheaper, this may create logistical difficulties for companies when looking to send a parcel, whilst also making it impossible for those working office hours to be at home to accept a delivery.

There seems to be no let-up and no reconciliation between the two sides, but there appear to be two certainties: the privatisation will go ahead, but it could well be eight years before we really know which side got it right.

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