Regulator faces tough Royal Mail hearing

Postcomm’s liberalisation plans are expected to face fierce criticism from all parties appearing today at a trade and industry select committee hearing on Royal Mail.

Allan Leighton, the company’s chairman, will condemn the regulator’s “misguided interventionism” and can expect support from unions concerned by the rate of liberalisation. Mr Leighton was stepping up opposition to Postcomm’s price control proposals as the consultation period drew to an end yesterday, saying they undermined the universal service and the operator’s recovery plans. “Now’s the crucial time, nine months into our three-year renewal plan. Without any certainty about the regulator’s stance, everyone is asking this company too much.”

Mr Leighton wrote to MPs last week criticising the regulator’s handling of market liberalisation. He said over the weekend he would “not tolerate any internal interference in how (the) company should be run or structured”. This followed proposals, which the regulator will explore next year, to separate postal deliveries from the rest of the group to stimulate competition.

Martin O’Neill, chairman of the trade and industry select committee, said he expected “robust expressions of concern” from all parties, including the National Federation of Sub Postmasters. .

Postwatch, the consumer watchdog, may be the only voice of discord. In its official response to Postcomm’s proposals it supported most of the regulator’s plans and said the price controls would not damage Royal Mail. But it had “serious reservations” about the method of average revenue price control, which is “overly complicated”.

The Communication Managers Association and the Communication Workers Union support Royal Mail on price controls. The CMA said the proposals would cost 10,000 jobs and wants liberalisation to be “gradual, measured and controlled”.

Meanwhile Mr Leighton and Adam Crozier, the former chief executive of the Football Association, refused to comment on reports that Mr Crozier was in the running to be Royal Mail’s next chief executive.