The UK postal regulator, Postcomm, has permitted Royal Mail to postpone adownward adjustment to its revenues, and compensation payments to bulk mail customers for falling
quality of service due to the British mail strike, until the next financial year so that it cancontinue to modernise.The downward adjustment in its allowed revenues and the compensation payments,which will together cost Royal Mail as much as GBP 300 million (EUR 443.6 million), are nowsuspended until after the end of the current UK financial year on 31 March 2008.
Royal Mail told the regulator that, due to the current industrial action by130,000 Communication Workers Union members, its quality of service had undoubtedly fallen makingit liable for the revenue loss and payments to customers.
Postcomm said it made the decision after consulting the CWU, as well asstakeholder group Postwatch and the Mail Users’ Association, amongst other bodies.
The regulator said in a statement: “The reason for this decision is thatPostcomm wishes to ensure that – against a background of Royal Mail’s current financial position,including its substantial pension deficit – the possibility of having to pay compensation and/orearning reduced revenues next year does not discourage the company from taking the steps needed tomodernise its business, which will be to the benefit of all mail users.”
A second nationwide strike by Royal Mail workers is to be held from Thursdayat 19.00 through Friday in protest at a below-inflation, 2.5% pay offer and radical cost-cuttingprogramme at the UK’s state-owned postal operator.
Meanwhile, another mail company, the DX Group, has complained to Postcommabout an alleged breach of pricing regulations by Royal Mail.
Postcomm is already investigating Royal Mail’s access charges followingcomplaints by rivals such as Dutch group TNT that its fees are too high for so-called “final mile”delivery.
