• the Royal Mail should be allowed to increase prices by a penny from April 2003; and
• that the rest of the regulator’s complex proposals be consulted on over a longer period.

Today, Allan Leighton, Chairman of Royal Mail, has issued a strong warning that there are details slipped into the regulator’s proposals at the last minute that could seriously affect Royal Mail’s finances. He highlights references about access pricing.

Whilst, it is doubtful that Royal Mail’s views and those of Postwatch will always coincide on this issue, all parties must have adequate time to analyse what is proposed and to provide considered comments. There is no need for the regulator to rush through these proposals. Postcomm can allow the penny increase and then take the time to put in place the rest of its regulatory package.

Peter Carr, Chairman of Postwatch, reacting to Allan Leighton’s announcement said,

” Customers will be confused by a public feud between the regulator and Royal Mail on issues that whilst important are technically difficult to understand. Given more time, both sides will be able to explain their respective positions and sort out any common ground. It is not essential for all sides to agree. It is, however, desirable that all the parties understand. We remain of the view that the regulator should signal now that the consultation period is being extended but in the meantime Royal Mail can increase prices by a penny.”

“We are seeing proposals for the first time and 28 days is not enough. Following even an initial review, we believe there will be problems implementing what is being put forward. For example, the regulator is proposing that customers cannot claim compensation for delayed mail sent by a “bulk mail product” (e.g. utility bills and bank statements). How will customers know which product was used? Is the regulator proposing that customers learn to differentiate between Mailsort, Walksort and metered mail – surely not?”