Last chance for Corbett to put his stamp on UK Royal Mail
Time is running out for Graham Corbett if he wants to complete his task of turning Royal Mail into a functional part of a competitive mail market. The chairman of Postcomm, the postal regulator, has less than a year before he steps down, and he has shifted into fifth gear.
“The big challenge this year will be access pricing,” Mr Corbett says, referring to the amount competitors who collect mail would have to pay Royal Mail to sort and deliver their post.
Mr Corbett intends to bring the issue to a more speedy resolution than price controls, which triggered a six-month dispute with Royal Mail. Postcomm will issue a determination on UK Mail, a test case, before the end of May and Mr Corbett says he will try to keep the ensuing consultation process down to three months.
His more combative tone is designed to restore Postcomm’s tarnished image. In the past year it has been attacked by Allan Leighton, Royal Mail’s chairman, for being bogged down in “regulatory treacle”; by Postwatch, the consumer watchdog, which has criticised its separation of price regulation and access pricing; and, more recently, by the Department of Trade and Industry which, it was rumoured, curtailed Mr Corbett’s term in office because it wanted to see a new era of lighter-touch regulation.
But Mr Corbett says: “I’ve not been knocked down in any way. We’re not going to back off from what we think we need to do because I can’t stand the heat in the kitchen.”
Whether Mr Corbett decided to step down voluntarily or whether he was given a slight push by the DTI, he says he understands the department’s motives for “spinning” his departure. “They’re a 100 per cent shareholder of Royal Mail; it would be very surprising if they strongly supported the regulator when Royal Mail is shouting blue murder.” But, he says, “I will make a noise if it happens again”.
He is determined to move on from the controversy that has surrounded his three-year chairmanship. This week Postcomm put a review of the postal regulatory regime on its website, tracking Royal Mail’s progress in the past three years.
It shows a rise in the percentage of first-class mail arriving the day after posting; a decrease in stamp prices, adjusted for inflation, since March 2001, which will continue under the new price controls; and Royal Mail’s mail business making a profit despite a more competitive postal market.
“I’d like to think that our existence was among the pressures that have encouraged Royal Mail to make these changes,” Mr Corbett says.
Postcomm’s determination next month over how much UK Mail, part of Business Post, will have to pay Royal Mail will end a debate started in April 2002. Business Post, after failing to agree a price with Royal Mail, referred the matter to Postcomm. Its decision on this case will set the pattern for other operators.
Postcomm has not yet settled on a price. But in February, a “detail” in Post comm’s price control proposals assumed Royal Mail’s competitors paying 14p per first-class item to use the company’s delivery network. Mr Leighton said any price below 21p for first-class mail would mean Royal Mail losing money.
Postcomm is likely to choose something between its earlier assumption of 14p and Royal Mail’s proposed 21p. Either way, Mr Corbett expects a tough fight.
