UK Postal watchdog Corbett to be axed

Postal regulator Graham Corbett is to be ousted by the government in a clear victory for Royal Mail chairman Allan Leighton who has been at war with him over stamp price increases and competition.
Announcement of the decision by trade and industry secretary Patricia Hewitt could be made as early as tomorrow triggering an immediate rush to find a successor.

Mr Corbett was charged with finding a delicate balance between opening up the postal market to private sector firms to increase consumer choice while allowing the Royal Mail time to restructure and compete effectively.

But his direct manner and hardline stance left Mr Leighton, the postal unions and an increasing number of backbench Labour MPs arguing he was endangering the future of the business and thousands of public sector jobs.

Ms Hewitt will argue that Mr Corbett has successfully completed the start-up phase of regulation in his contractual three year deal but that it is now time to find someone else to develop regulation to a new level.

Mr Corbett will be asked to stay on for an interim period while a replacement is found, but the mechanism for finding a successor has already been agreed by the trade and industry secretary.

In a clear bid to show a new era is to ushered in, Ms Hewitt will emphasise that candidates for the job will have to show specific postal experience.

Private sector competitors such as Germany's Deutsche Post and Holland's TPG will fear the demise of Mr Corbett could lead to the appointment of someone more sympathetic to Royal Mail.

The move will be met with surprise but delight by the Communication Workers Union which sees the chance for a more "progressive" regime. "Corbett has seen the job as just one about competition and profit instead of looking at the wider issues such as service delivery, jobs and conditions of service," said a senior union spokesman.

The government had brought some of the problems on itself however by appointing Mr Corbett under the Post Office Act 2000 and then allowing him, effectively, to write his own job description, the spokesman added.

"He single-handledly got up the nose of senior Royal Mail management, the unions and Postwatch and that takes some doing," he concluded.

Royal Mail fought for permission to raise its first and second class post charges by 1p and was believed to have won only because politicians put pressure on Mr Corbett to agree.

Mr Leighton argued that price controls were still so onerous that the future of his organisation was endangered and threatened to take Postcomm to the competition commission.

Growing frustration with Mr Corbett among backbench politicians was on display at a recent select committee meeting when he was grilled by MPs. The regulator was forced to defend a 240-page document on price controls and increases for Royal Mail which had been derisively dismissed by Mr Leighton as "regulatory treacle".

Both the Royal Mail and consumer watchdog Postwatch had protested about the short 28-day deadline to respond to the document.

Royal Mail continues to lose over £1m a day as it struggles with performance targets, industrial relations difficulties and trying to maintain its nationwide network of post offices.

Meanwhile Postwatch said yesterday that it had submitted a "super-complaint" in line with the Enterprise Act 2000, saying Royal Mail was abusing its market position.

Differences of opinion

The row between Royal Mail chairman Allan Leighton, the unions and postal regulator Graham Corbett has become increasingly personal and bitter:

Corbett on Leighton: "There is nothing a monopoly would like better than to charge what it likes. I don't think Allan Leighton is any different from anyone else in that."

Leighton on Corbett: "Postcomm is mishandling what should have been a simple process…Reaching the goals in our renewal plan will be the biggest commercial turnaround ever, but we can only do it if the regulator abandons his unrealistic, flawed and totally unacceptable proposals."

Peter Skyte of Amicus union on Corbett: "The government has created a Frankenstein's monster in the form of regulation which is now out of control."