Tag: Royal Mail

Following consultation on its final proposals, issued in December 2005, Postcomm has made only very limited modifications to Royal Mail’s price and service quality controls that will apply for the four year period commencing 3 April 2006. Accordingly, retail stamp prices can go up by no more than 2p this year (to 32p for first class, and 23p for second class). The modifications reflect feedback from stakeholders during the consultation period. These are now subject only to agreement with Royal Mail and to the statutory 28-day process required under the Postal Services Act. The changes Postcomm is making to the December proposals are designed to strengthen customer protection against Royal Mail’s dominant position and to provide further safeguards for the “one price goes anywhere” universal service.

Sharp differences between the Royal Mail and ministers over the postal operator’s business plans have spilt into the open, hampering talks over whether to pour more than Pounds 1bn of public money into the state-owned company. The Department of Trade and Industry believes Allan Leighton, Royal Mail chairman, needs to produce a firmer, more detailed and more credible business strategy before the government can agree to provide any financing.
There is uncertainty over the detail of the postal operator’s plan to give employees a stake in the company, a scheme that has been touted by Mr Leighton but which is opposed by the postal workers’ union and many Labour MPs. Ministers have made clear they are still waiting to see a well-argued case that the scheme would boost productivity. Yesterday, the DTI confirmed there had been “exploratory talks” about the share scheme but added that it had “not received robust or firm proposals on (it) as yet”. However, Royal Mail re-jected the suggestion that its proposals lacked detail and robustness. “We have submitted a very detailed, well-argued case for investment in the company, which is still with the government,” the company said. “The employee share scheme is an integral part of the case.”