UK Royal Mail told to move on access charges

Postcomm, the postal regulator, has warned Royal Mail not to resist further liberalisation of the mail market, while a survey of business customers complained that the quality of the postal operator’s service had deteriorated.

The regulator is expected to make a decision on the thorny issue of access charges, the price private mail companies will pay to use parts of Royal Mail’s network. Postcomm this year proposed that Royal Mail charge rivals 11.5p for each letter in the lightest bracket but the company complained this would lead to substantial losses.

Royal Mail last week announced a £3m profit for the first half of the year after several years of losses. The group hopes its turnround can be sustained by thousands of job cuts and ending the second daily mail delivery, which carries 3% of post but incurs 20% of delivery costs.

Royal Mail also said last week that if it was unhappy with Postcomm’s decision on access charges it would take the case to judicial review. Postcomm has been reviewing its proposed access charges for several months following feedback from Royal Mail and private mail companies, and is trying to find a tariff acceptable to both parties.

At a mail industry conference in London yesterday, Martin O’Neil MP, chairman of the trade and industry select committee, predicted the charge for letters would be between 12p and 14p.

Martin Stanley, Postcomm chief executive, warned at the same conference that further rows over access charges would slow down postal industry liberalisation, possibly by years.