Tag: Royal Mail

Postcomm chairman Nigel Stapleton has dismissed as “laughable” Royal Mail’s claim that its proposed price freeze will slash GBP2bn off the company’s market value. The regulator’s review of price and service regulations for 2006 has ignited the row, by ruling Royal Mail cannot raise prices by more than 3 per cent until 2010. Royal Mail chairman Allan Leighton says the document is a “blueprint for Royal Mail’s inexorable decline”. Stapleton has countered by accusing the state-owned company of consistently “crying wolf” at proposals. “It thought the last price control was Draconian, and has outperformed it by nearly 100 per cent in profit terms,” he says.

Postcomm’s proposals would – if implemented – lead to the inexorable decline of Royal Mail by ensuring it cannot compete in the open market, the company warned today.

Royal Mail also said that Postcomm’s proposed massive extension of regulation into all aspects of its pricing would threaten the Universal Service and encourage widespread cherry-picking by rivals from April next year. The company added that, unless the proposals are substantially changed to give Royal Mail a level playing field, it will have no alternative but to go to the Competition Commission.

Royal Mail chairman Allan Leighton said: “These proposals will literally starve Royal Mail of vital investment and so wreck the quality of service we have fought so hard to improve. We cannot accept them. It’s as simple as that.”