Royal Mail IPO: Lib/Dem’s Lord Razzall Predicts All-week Mail Delivery

on Sep 19, 2013
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iNVEZZ.com, Thursday, September 19: The privatisation of Royal Mail will be such a success that it will lead to a major improvement in the group’s services, it has been claimed.

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Lord Razzall, the Lib/Dem Trade and Industry spokesman in the Lords, predicted on Tuesday during the party’s conference in Glasgow that the forthcoming IPO would lead to weekend postal deliveries within five years.
The UK government earlier this month announced its intention to privatise the state-owned postal business, but the plan has been met with fierce opposition from trade unions.

**Improvement in services**
The Guardian quoted Lord Razzall as saying, “I will make a prediction that in five years we will have a seven-day-a-week Royal Mail service and the Royal Mail will have bought one of the major operators in continental Europe”. He made it clear that he fully supported the privatisation.
The Lib/Dem peer dismissed concerns that the Royal Mail’s universal service obligation – under which the company is required to deliver letters six days a week to anywhere in the country – would be removed after the IPO. He pointed to the rapidly growing popularity of online shopping, arguing that it would be the catalyst for Royal Mail’s success as a private sector business.

**Opposing view**
A strongly contrary view was expressed by Mario Dunn, the campaign director of the Save Our Royal Mail campaign, who also spoke at the event. Dunn was adamant that the privatisation would lead to a lower quality service, reduction in deliveries and the workforce, and would put the focus on investor profits instead of service investment.

According to Dunn the IPO will also adversely impact on community services, especially in rural areas where, he believes, services will be “cut to five times a week, then four, then three”.
**Retail investors**
Meanwhile, a recent City survey suggests that small investors are planning to ignore the Royal Mail IPO. More than 50 percent of experienced traders surveyed by share dealing service SharePrice said they were against the flotation or else expressed fears that it would fail.

Stockbrokers expect that the general public will be even less interested in the privatisation, contrary to business minister Michael Fallon’s hopes that millions of ordinary people will purchase shares in Royal Mail.
!m[Public May Shun Float, New Survey Suggests](/uploads/story/5563/thumbs/pic1_inline.jpg)
The Guardian quoted Justin Urquhart Stewart, director and co-founder of stockbroker Seven Investment Management, who said that there had been “remarkably little” interest from people not experienced in share trading.
“There’s some interest from those that understand shares, but there’s no sign of Sid,” he said, referencing to an advertising campaign to encourage the public to invest in the 1986 privatisation of British Gas.
“The British Gas float was highly advertised on television. But we’ve had nothing so far on Royal Mail,” Stewart said, adding that the broader audience probably isn’t aware of the forthcoming IPO.

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