Peter Carr, Chairman of Postwatch, commenting on the proposals said, “This deal has been arranged ignoring customers who will have to foot the bill. Customers want Royal Mail to succeed but also want better services in return for any increase in prices.

“Postwatch has consistently supported a penny price rise for Royal Mail from 1st April 2003. This would give Royal Mail the extra £170 million a year it needs to fund its recovery plan. An extra £510 million over the three years of the price control.

“ We do not support customers having to pay a further £240 million and want to probe the claims behind the proposals. But we need the time to do so. The 28 days being allowed by the regulator is not enough and we shall be asking the regulator for an extension. However, we do not want to hold-up the uncontentious penny price increase that Royal Mail has already announced. The regulator can do this under the existing licence. To delay the penny increases could seriously affect Royal Mail’s financing arrangements and would not be in the best interests of customers.

“We cannot understand why the regulator is only introducing an enforceable compensation scheme for delayed mail. Postwatch and the Royal Mail receive many more complaints about lost mail than about delayed items. In October the regulator proposed a comprehensive compensation scheme including lost, damaged and delayed mail. Two thirds of the scheme has been removed leaving 1 million dissatisfied customers without any effective legal redress.

“Over 50% of Royal Mails complaints are about lost items. To exclude them from the enforceable compensation scheme is ridiculous”

Notes to editors

1. Royal Mail complaints: 56% lost,9% delayed and 3% damaged (32% other).
2. For more information about Postwatch visit our web-site www.postwatch.co.uk