Royal Mail puts pressure on Postcomm

Royal Mail, through an interview with the Financial Times and then issuing a press release, is trying to use the media to pressure the postal regulator Postcomm to loosen the regulatory regime. This would allow Royal Mail to increase substantially the price of stamps to its domestic and small business customers and to reduce prices to large business mailers.

Postwatch, the watchdog for postal services, is confident that the regulator will not allow stamp prices to increase by 6 pence – far above the rate of inflation.

Postwatch, believes the regulator will cut through the rhetoric and instead will analyse objectively the hard numbers that must support any formal request, should Royal Mail make one.

Howard Webber, Chief Executive of Postwatch, commenting on today’s events said, “The current generous price control, which allowed first class stamps to increase from 30 pence to 36 pence between April 2006 and March 2010, has been in place for less than a year. Royal Mail has already taken advantage of the flexibility offered to increase prices by 2 pence in April 2006 and 2007.

“This four year deal was at the time welcomed by Royal Mail as providing the certainty it needed to plan for the future. But now they want more.

“Worse still, the price Royal Mail agreed through commercial negotiation for delivering mail for new operators is now said to be loss making. They want to change that as well.

“Instead of this attempt at management by media, Royal Mail should concentrate on continuing its impressive recovery and on meeting the challenges that competition brings. Postwatch believes that Royal Mail, should be at the heart of a competitive UK postal industry – but Royal Mail must be strong and positive thinking if it is to thrive as it should. It will be the competitive process, not regulatory decisions that will lead to innovation and improved customer services.”