Royal Mail monopoly: comment on delay
THE 12-MONTH delay in dismantling the Royal Mail’s monopoly, announced by the postal regulator yesterday, has bought Allan Leighton a little time, but it is not the triumph for the former Asda boss that some are suggesting. Considering all the blood curdling noises the Consignia chairman has made about the damage that competition will do to the business, a one-year stay of execution is small consolation.
Graham Corbett, the chairman of Postcomm has largely resisted the public relations barrage mounted by an unholy alliance of Consignia and its unions. He has also withstood some pretty blatant arm twisting from the Trade and Industry Secretary Patricia Hewitt to go easy on the postmen.
In the scheme of things, a12-month delay is inconsequential, which is why the postal users lobby was in relaxed mood yesterday. Compared with the long periods of protection from competition that were enjoyed by other former monopolies such as gas, telecoms and electricity, the postal market is being opened up at break-neck speed. It took the Conservatives 10 years to begin chipping away at British Gas’s monopoly following its privatisation, and even now it retains 70 per cent of its market.
Consignia wanted the regulator to follow the European route to liberalisation, which is to lower the monopoly weight limit in stages, knowing this would play into the hands of the incumbent operator. Instead, Postcomm has chosen to abolish the monopoly altogether and then license rival operators to enter the market in stages. Initially, this will be of use only to bulk mail and junk mail senders, but by 2007 everyone will have a choice of who delivers their post and how often. If Consignia still had its monopoly, it would be one delivery a day sometime before mid-afternoon, like it or lump it.
Mr Leighton has a mountain to climb at Consignia and only three years to get to the top according to the timetable for his recovery plan. The regulator has cut him some slack but not very much.
