UK Royal Mail goes to war against post watchdog

Lawyers have been called in to settle a row that has broken out between Royal Mail and Postwatch, the consumer watchdog for postal services.

Allan Leighton, Royal Mail’s chairman, is demanding that Postwatch retracts comments made last week stating that consumers should not bother using first class stamps on Christmas cards this year because the service is so unreliable.

Letters have been flying between the two groups as relations have hit a new low.

Royal Mail has hired the law firm Shillings, and Postwatch is represented by Wragg & Co.

David Simpson, a Royal Mail spokesman said: “We are furious at the misleading impression Postwatch has given that first-class mail does not arrive faster than second class. That is absolute rubbish.”

But Postwatch is unfazed by Royal Mail’s anger. One source said defiantly: “This has gone off like a bomb. We are being bullied and Royal Mail is trying to gag us, but we will not be gagged.

“It is a big institution and we are a tiny consumer council”.

The row erupted after Postwatch claimed more than three out of 10 letters posted first class were not delivered the next working day. It also said only one in 10 second-class items failed to be delivered on time in the Christmas run-up.

The chairman of Postwatch, Peter Carr, said: “Customers should therefore not only post early but also use second-class stamps right up to the last recommended posting date, which is December 18.

“We reviewed Royal Mail’s performance and found that while second-class performance dipped slightly, first class declined dramatically. Postwatch recommends customers use second-class stamps at Christmas.”

The National Federation of Sub-Postmasters, which represents some 16,500 post offices, is also incensed and “outraged” by the remarks. It has written to Carr and said its members had made a “serious request” for legal action if the comments were not retracted.

Royal Mail will not be drawn on the contents of the two legal letters it sent to Postwatch last week or whether it would issue its own legal proceedings if an apology is not received.

Simpson said the “correspondence was strictly private and confidential on both sides”.

Industry experts say that if the public adopts the advice, it will threaten GBP60m of Royal Mail’s revenue, a loss that the group can ill afford.

Although Postwatch is an independent watchdog, it is funded by Royal Mail.

Leighton said last month when he reported half-year results that the group is on course to make an operating profit of GBP400m this year, a target which would trigger bonus payments of GBP800 to each postie in Britain.

This is a far cry from two years ago when Royal Mail was losing Pounds 1m a day.

But Leighton and his chief executive, Adam Crozier, stressed there was still a long way to go, and profits would be hit in future by increased pension-fund contributions that would have to double to almost GBP800m a year to plug the Royal Mail scheme’s huge deficit.