Tag: Royal Mail

ROYAL MAIL PACKAGE LOST IN THE POST: POSTCOMM MUST FOCUS ON CREATING A COMPETITIVE MARKET
Allan Leighton’s appointment as chairman of Royal Mail Group was an act of genius. The former Asda boss has driven through cost cuts to lift this once highly profitable monopoly out of the red. He has begun to put it on a firmer footing to face competition as the market is opened up over the next three years. And he is ambitious enough to plan returning the post office network to profit by turning it into “the EasyJet of banking”. All this while the foremost advocate of “going plural” continues to hold a fistful of other top jobs.

There is a downside in all this, however. Running Royal Mail during these most testing of times would be no easy matter full-time. Less than full-time, quick judgments must be made – and there is a premium on short, sharp campaigns against threats to the business plan. In most cases it is Postcomm, the regulator, that is the scapegoat – most recently over its proposals for price controls.

Allan Leighton warned yesterday that he would walk out of the Royal Mail if the regulator continued to “interfere unreasonably” with his plans for restructuring the loss-making business. He also told a trade and industry select committee he would seek an immediate – albeit high risk – referral to the competition commission if Postcomm reacted negatively to a new plan for raising basic postage prices by 1p.

A senior MP challenged Royal Mail’s repeated attacks on Postcomm yesterday by comparing the company’s rhetoric to that used by British Gas during the gas market’s liberalisation in the mid-1990s.

Martin O’Neill, chairman of the Commons trade and industry committee, asked Allan Leighton, Royal Mail chairman, whether this was not the “same self-serving defence of inefficiencies” used by any regulated company afraid of competition.

The challenge came as Mr Leighton stepped up pressure on the regulator by warning that its price control proposals could damage Royal Mail’s renewal plans.