Mail service watchdog predicts acceptable compromise over postal prices

The postal regulator will not be “bullied” over its plans to limit Royal Mail’s price increases but the mail operator would be able to “live with” its final proposals, Graham Corbett predicted yesterday.

The chairman of Post-comm, whose commissioners will meet today to finalise its plans after three months of consultation, said: “I don’t expect they (Royal Mail) will be delighted but I hope we can come up with something they can live with.”

The regulator’s decision will be made public towards the end of next month following further discussions with Royal Mail, Postwatch and the unions and amendments to Royal Mail’s licence.

Postcomm’s proposals triggered a furore in September when Allan Leighton, chairman of Royal Mail, said the plans would create a Pounds 460m black hole in the company’s finances and jeopardise its three-year renewal plan.

Royal Mail has approached MPs and the Department of Trade and Industry to put pressure on Postcomm to step back from its proposed three-year price freeze.

Mr Corbett said the regulator’s primary responsibility was to “get it right” by users of mail services by not allowing runaway price increases.