PostComm's independence in extremely good health
Graham Corbett, Postcomm chairman, denied yesterday that the postal regulator's independence had been compromised by its retreat from controversial plans to open the market to competition.
"My independence and that of the commissioners feels in extremely good health," he said.
He dismissed "absolutely" the idea that the regulator had retreated. "It is one of those 'heads you win, tails you lose' situations. Either we listened, in which case we were accused of backtracking, or we did not listen and we were accused of being stiff necks."
The regulator has slowed its proposals for rapid liberalisation of the postal market. While the method for introducing competition remains as planned, the introduction of the first stage has been put back from April 2002 to January 2003. Full competition will be in place in the spring of 2007, a year later than originally suggested.
Mr Corbett said he "was not aware" of government pressure, particularly from the Department of Trade and Industry, to change Postcomm's plans. "If I was Consignia's only shareholder, I would want to have my say in a process like this. I do not see it as political."
However, suspicion lingers that the government's concerns bore heavily on the regulator.
Postcomm's initial proposals in January drew the wrath of MPs, trade unions and Consignia. But most importantly the speed of the proposals rattled Patricia Hewitt, trade and industry secretary, whose department owns Consignia.
Ms Hewitt met Postcomm earlier this month, the day before its meeting to confirm its proposals. She is thought to have warned them against moving too fast.
She wrote to the regulator, pressing it to "consider very carefully as to the size and timing of market opening".
The DTI yesterday welcomed Postcomm's "common-sense approach". The relaxed response belied weeks of behind-the-scenes lobbying.
The regulator's plans came out as a stream of bad news about Consignia and its plan for thousands of job cuts started to make headlines.
Consignia was suddenly in the sick bay and Postcomm's proposals were seem by some as dealing a fatal blow to the company.
Allan Leighton, who became Consignia's chairman in January, changed Consignia's fighting tactics. He stopped the war of words that had developed with the regulator and put forward a more measured response.
He said yesterday the company was "encouraged by the fact that Postcomm have taken our concerns very seriously".
"Consignia will face only a modest level of competition while it implements its three-year renewal plan," Postcomm said. It spoke of "a number of detailed changes which collectively add up to a material shift in the balance of risk in Consignia's favour".
The Communication Workers Union "welcomed Postcomm's backtracking from the reckless and irresponsible proposals it had published earlier in the year". But Paul Carvell, chief executive of Business Post, the Birmingham-based group which has an interim licence from Postcomm and is hoping to win a permanent licence, said he was "delighted" with Postcomm's plans.
Postwatch, the postal consumer watchdog, said it was "relieved that . . . Postcomm had made only minor adjustments to its proposals".
But Postcomm's plans cannot go full steam ahead yet.
The regulator still has to resolve the question of how much rival operators will pay to access Consignia's delivery network before they can begin operating. Editorial Comment, Page 20
Timetable of opening up the postal service to competition
January 21 Allan Leighton takes over as Consignia chairman. January 31 Postcomm announces radical plans to expose Consignia to competition. Ministers, Consignia and postal unions taken by surprise at the speed of proposed market opening. March 6 Consignia accuses Postcomm of getting its sums wrong over the impact on the company of ending its monopoly on bulk business mail. Postcomm denies the claims. March 13 Postcomm delays introduction of competition by at least a month to give critics more time to respond. March 22 Consignia announces 15,000 job cuts at Parcelforce. Another 15,000 expected to be announced in June at Royal Mail. April 12 Consignia warns of stamp prices spiralling out of control and says it has no choice but to ask the regulator for an immediate increase to cope with the threat of new competition. April 30 Public accounts committee accuses Postcomm of "making decisions in the dark". May 15 Patricia Hewitt, trade and industry secretary, meets Postcomm the day before its crunch meeting to finalise proposals. She presses the commissioners to "consider very carefully as to the size and timing of market opening".
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FINANCIAL TIMES UK 30th May 2002
BRITAIN: POST REGULATOR DEFENDS COMPETITION PLANS
The chairman of Britain's postal regulatory body has defended its retreat from controversial plans to open the country's postal market to competition.
Postcomm's initial prop-osals in January drew the wrath of members of parl-iament, trade unions and Consignia – the new name for the Post Office.
Most importantly, the speed of the proposals perturbed Patricia Hewitt, the trade and industry secretary, whose department owns Consignia.
Graham Corbett, chairman of Postcomm, insisted that its independence had not been compromised by yesterday's announcement. He dismissed the idea that the regulator had retreated. "Either we listened, in which case we were accused of backtracking, or we did not listen and we were accused of being stiff necks," he said.
Postcomm has slowed its original plans for rapid liberalisation. While the method for introducing competition remains as originally planned, the first stage has been put back from April this year to January 2003. Full competition should be in place in spring 2007 – a year later than originally suggested.
Mr Corbett said he "was not aware" of government pressure on the regulator to change its plans.
Suspicion lingers that the government's concerns bore heavily on the regulator. Ms Hewitt met Postcomm earlier this month, a day before a meeting to confirm its proposals. She is thought to have warned it against moving too rapidly.
She wrote to the regulator earlier this month, pressing it to "consider very carefully as to the size and timing of market opening".
Allan Leighton, Consignia's chairman, who is putting the company through a three-year cost-cutting plan, said Consignia was "encouraged by the fact that Postcomm have taken our concerns very seriously."
