Royal Mail in row over congestion charges

Lossmaking postal organisation Royal Mail could be saddled with a pounds 2m a year bill after its regulator Postcomm recommended that it should be struck off the list of businesses that are exempt from the London congestion charge. Postcomm’s recommendation is likely to sour relations between the two organisations, already at odds over a complex price capping formula for postal costs. Royal Mail said this week that it hopes to persuade Transport for London (TFL) that it need not pay the charge, because it is under an obligation to provide a universal service. Competitors can pick and choose their business, Royal Mail argues, but the organisation must deliver any letter costing under pounds 1 to post, no matter how much it costs to deliver. A spokesman said: “We were originally on the list of organisations and groups getting a discount, but Postcomm objected. We think we have a good case for a discount – and we hope we will hear soon.” TFL has said that Royal Mail now has to prove it deserves to be let off the pounds 5 a day charge for every vehicle entering the zone. A Postcomm spokesman confirmed yesterday that the regulator did not think Royal Mail should be exempt from charges. “It would be anti-competitive if they did not have to pay,” he said. “The likes of Hays and Business Post have to pay the charges. This would not be in the best interests of competition.” Royal Mail’s monopoly on letters costing under pounds 1 to post is set to end this year – but the obligation to provide a universal service will remain. Postcomm was set up to manage the introduction of competition into the market without crippling Royal Mail, or giving it an unfair advantage. However, Postcomm has already backtracked on one decision over the speed at which it opens up the market, and looks likely to do the same over the price capping formula it had proposed to introduce. The organisation is now expected to announce the results of consultation on this issue in early February.