Ministers try to step back from post row CONSIGNIA:

Ministers attempted yes-terday to distance themselves from a potentially explosive row in the post office – and the prospect of a nationwide strike – over plans to open up of Consignia’s postal services to competition.

Patricia Hewitt, trade and industry secretary, said the government would not get involved in the decision by Postcomm, the regulator, to open the market for bulk business mail, which makes up almost half the letters sent in Britain, to rival operators within eight weeks.

“The proposals set out for consultation are a matter for Postcomm,” she said in a statement. “Postcomm’s primary duty is to maintain the universal postal service. Subject to this their role is to promote consumer interest where appropriate through the introduction of competition.”

But privately, ministers admitted they were alarmed at the prospect of a national postal strike coming on top of the rail strikes which have crippled commuter services in the south and the north.

With the leftwing Communication Workers Union already balloting members for a national strike, the government is unlikely to be able to stay out of the fray for long. Union officials said the Postcomm decision was likely to harden opinion among CWU members in favour of an all-out stoppage.

The CWU reacted angrily to the regulator’s decision. “The regulator appears to have no concern for the industry it is supposed to protect and improve,” said Billy Hayes, CWU general secretary. “It sees that Royal Mail is in a precarious financial situation, but instead of offering assistance to ensure the continuation of the universal service, it seeks to undermine it.”

The Conservatives welcomed Postcomm’s decision and said the government could not run away from its responsibility for problems with the postal service.

Labour shied away from outright privatisation and opted for a compromise structure in which the Royal Mail was renamed Consignia and told to prepare for gradual competition in return for greater commercial freedom. Consignia has been criticised for failing to take advantage of its new freedoms and is losing Pounds 1m a day.

“The government cannot blame anyone but itself for the mess since it is a problem of its own making,” said Nigel Waterson, a trade and industry spokesman. We welcome the report and agree increased competition is the best way to guarantee postal services for the consumer.”

Further trouble for Consignia will also cause the government problems among its own MPs, may of whom are sponsored by the CWU.

Bob Laxton, Labour MP for Derby North and PPS to Alan Johnson, employment minister, criticised Postcomm’s proposals and urged the regulator to reconsider. “This a pretty devastating position Postcomm have taken. It is an over-reaction three years in advance of liberalisation that is going to be introduced in Europe,” the CWU- sponsored MP said.