ONE of the inevitable consequences of the island’s regulator looking to increase competition faced by an already under pressure Guernsey Post was for the Office of Utility Regulation’s accountability to be questioned.

For GPL and the postal union, the CWU, losing in whole or in part the reserved area – which gives it its partial monopoly – was the nuclear attack they dreaded. As a result, they believe, the service will be damaged, the utility will run at a loss and jobs will be lost.

In particular, breaking the monopoly would damage the six-day service that so many islanders have come to rely on.

Except, counters the OUR, overtime costs have doubled in three years, overheads have more than doubled and average pay has risen by 49% over the last five years.

In short, it says, there is clear scope to cut costs and some of the areas where expenses have risen are due to diversification and so the postal consumer should not have to pay them.

Since GPL has already cut millions from its payroll and hit the targets set for it by the OUR, this latest development will be seen as an unfair and unwarranted attack on the utility and one that its management and staff rightly will not take lying down. No one should have any doubt about how strongly GPL and its staff feel about the OUR’s decision – or its expected consequences.

So it will fight – and who ultimately adjudicates on whether the regulator got it right or wrong?

There is one easy way, of course. Sit back and see whether GPL cuts costs and operates according to the OUR’s theoretical model. Or whether it just goes bust.

Many, and that includes States members, will conclude such an approach is unacceptably risky and fundamentally raises the issue of who regulates the regulator. If the OUR has got it wrong, who holds it to account?

No one will believe that the issues are as black and white as currently painted but unless confrontation can be avoided, this is shaping up to be a trial of strength in which either the role of the regulator will be challenged in the States or a cherished service risks being damaged.

Since neither option is desirable, who will resolve the issue?