Royal Mail Asks Parliament for Pricing Freedom

26 November 2002

Former supermarket boss Allan Leighton, not unused to hotseats, is finding the chairman’s throne at Britain's state-owned Royal Mail Group a tad sultry – thanks to the activities of postal regulator Postcom.

Postcom, whose remit it is to ensure that the former monopoly does not abuse its present dominance of the nation’s postal market, has laid some draconian restrictions on RMG, the most severe of which is a cap on price increases.

In October PostCom chairman Graham Corbett announced he would allow RMG to raise the price of domestic first and second class stamps by one penny, but that it must freeze the average price of its services over the next three years at £0.291 ($0.455; €0.459).

This, Leighton claims, will undermine his plans to return the mega-lossmaking leviathan to profit (it is currently shedding £1 million daily) and has written accordingly to all 659 members of parliament to express his concern - the second time he has done so.

“I hope you won't mind getting a second letter from me but time is running out to change the regulator's mind,” he wrote Monday. “[Corbett] is likely to take key decisions in a matter of weeks which will have huge implications for the future of the UK’s postal service and the network of post office branches. I would, therefore, urge you to write to Postcom to make your views known.”

Leighton calculates that the level of the regulator’s price cap could cost RMG up to £460 million. “Postcom is mishandling what should have been a simple process,” he argues. “Reaching the goals in our renewal plan will be the biggest commercial turnaround ever, but we can only do it if the regulator abandons his unrealistic, flawed and totally unacceptable proposals.”

Data sourced from:; additional content by WARC staff