Consignia - soon to revert to its original branding as the Royal Mail Group – said this weekend it was contemplating legal action against PostCom over its plans to cap price increases over a three year period [WAMN: 04-Oct-02].

In agreeing to a one penny rise on first and second class postal rates – to £0.20 ($0.31; €0.32) and £0.28 – as of April 2003, Postcom has also imposed a price cap of 2.5% below the retail price index for three years from next April – effectively a price freeze if inflation rates remain at today’s level.

Agreement to this, argues RMG chairman Allan Leighton is akin to “putting ourselves in a headlock”. He added: “We would be like turkeys voting for Christmas if we accepted this pricing package.”

But before enriching a legion of lawyers at taxpayers’ expense, the Royal Mail hopes for a change of heart by PostCom: “We’re aiming to persuade the regulator that they are not right,” said the spokesperson.

But Billy Hayes, general secretary of the Communication Workers Union, is in militant mood, calling for the head of Graham Corbett, PostCom chairman, a former chartered accountant and director of Eurotunnel who took up the role eighteen months ago.

Hayes believes PostCom is undemocratic and that Corbett is the wrong man for the job. The regulator, he argues, should be answerable to parliament and take into account additional issues such as social, employment and consumer interests alongside competition matters.

Data sourced from: Times Online (UK); additional content by WARC staff