Regulator could ruin us warns Royal Mail chief

The chairman of Royal Mail today launched a fresh attack on the industry’s regulator, warning that its painfully slow regime was threatening the future of the postal service.

Allan Leighton said the business was running out of time to put in place a recovery plan, blaming constraints from Postcomm.

Mr Leighton said it was now nine months since the Royal Mail submitted plans to raise stamp prices by 1p as part of its plan to tackle losses which are still running at more than #1 million a day.

“All we’ve got after we’ve submitted more than 1,000 detailed pieces of evidence is a set of hugely complicated, fatally damaging proposals which are totally unacceptable and disastrous in their impact.”

Mr Leighton warned that regulation could “ruin” rather than save the postal business.

He said his message to the regulator was simple: “Give us the green light for the modest price package we have been advocating for nine months and which is essential to the financing of our renewal plan.

“Take us off the regulatory treadmill and let us get on with running this company without these constant diversions into debates on company structure or regulatory theory.”

Mr Leighton said that if the regulator would not put forward a straightforward regime Royal Mail would seek a referral to the Competition Commission of the “complex price constraints” being proposed by Postcomm.

But Mr Leighton conceded that could take another six months which would hold up even further the recovery plan.

He warned that pricing proposals from Postcomm would turn a #510 million revenue boost from the 1p stamp rise into a #460 million “black hole”.

Mr Leighton pointed out that more than half the postal market will be open to competition from January 1 in the biggest step change in competition in Royal Mail’s history but rival firms will face no price restrictions.