Royal Mail 'can't control its costs'

15 March 2007
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15 March 2007

Royal Mail has refused to comment on claims by the postal regulator that it was "using an attack" on the regulatory structure as "a smokescreen for its own lack of progress" in tackling high labour costs.

The postal operator called for regulatory changes to reduce rates for business customers (Web news, 28 February). This followed the loss of large contracts with BT and the Department for Work and Pensions.

Nigel Stapleton, chairman of regulator Postcomm, said the decline in Royal Mail's profits was not due to competition from other postal operators, but its "inability to control its costs" and growing pension deficit.

After the Royal Mail gave an interview to the Financial Times, postal watchdog Postwatch said the company was "trying to use the media to pressure the postal regulator Postcomm to loosen the regulatory regime".

A spokesman for Royal Mail said its proposed changes would "allow Royal Mail the freedom to fight for every last letter".


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