Postcomm’s Stapleton blasts ‘laughable’ UK Royal Mail GBP2bn loss claim

Postcomm chairman Nigel Stapleton has dismissed as “laughable” Royal Mail’s claim that its proposed price freeze will slash GBP2bn off the company’s market value.

The regulator’s review of price and service regulations for 2006 has ignited the row, by ruling Royal Mail cannot raise prices by more than 3 per cent until 2010.

Royal Mail chairman Allan Leighton says the document is a “blueprint for Royal Mail’s inexorable decline”.

Stapleton has countered by accusing the state-owned company of consistently “crying wolf” at proposals. “It thought the last price control was Draconian, and has outperformed it by nearly 100 per cent in profit terms,” he says.

Last month, Royal Mail celebrated record operating profits of GBP537m, with chief executive Adam Crozier picking up a pre-tax bonus of almost GBP3m for turning the company’s fortunes around.

Stapleton argues that Royal Mail’s claim that it would be devalued by GBP2bn is based on unfair comparisons with European operators such as Deutsche Post, which have greater investment and automation, and are hence more profitable.

Leighton claims: “We are now delivering the best quality service in a decade. These proposals are a kick in the teeth for our people.

“They destroy the hard-won gains on quality of service, and push us back into a spiral of decline.”

The DMA (UK) is meanwhile inviting the industry to fill in a questionnaire it has produced in response to Postcomm’s call for “a more persuasive argument” to halt Royal Mail’s pricing in proportion scheme (PM last week).