Angry Postal chief overturns break-up

Controversial plans to break up postal services have been dropped by the regulator Postcomm following a fierce rearguard action from Royal Mail chairman Allan Leighton.

He threatened to resign unless plans to hive off the delivery business from the rest of the postal system were abandoned.

A Postcomm spokesman said this weekend: ‘We have no plans to consider separation. This is definitely on the back burner.’ The consumer group Postwatch was pushing hard for the scheme. It wanted the regulator to introduce more competition by separating Royal Mail’s delivery business.

That operation would then be obliged to offer its services to other firms – not just Royal Mail.

Rivals such as TNT would have been allowed to collect and sort post themselves and use the established network of Royal Mail postmen and women to carry out at least part of the job of getting mail to homes and businesses.

Leighton feared that further regulatory intervention would set back his plans to overhaul Royal Mail and stem huge losses.

He told Financial Mail: ‘When I heard about these plans at the beginning of the week, I decided to give them both barrels.

‘I cannot tolerate a situation where outsiders seem to be running the company. It’s a bloody stupid idea when I am in the middle of restructuring the business and trying hard to save the company.

Leighton forces a U-turn by the regulator after attacking consumer group’s ‘stupid’ plan for Graham Corbett [the Postcomm chief] and I think he understands my views, but I do not understand what they are up to at Postwatch.

‘It is a case of people with no business experience with too much time on their hands.’ Postwatch said: ‘We have been dealing with a record number of complaints since Leighton took over. They are running at 6,000 a month.

‘More people complain about late deliveries and lost mail. One way of improving the service would be to allow more competition.’