BBC NEWS Americas Africa Europe Middle East South Asia Asia Pacific
BBCi NEWS   SPORT   WEATHER   WORLD SERVICE   A-Z INDEX     

BBC News World Edition
 You are in: Business  
News Front Page
Africa
Americas
Asia-Pacific
Europe
Middle East
South Asia
UK
Business
E-Commerce
Economy
Market Data
Entertainment
Science/Nature
Technology
Health
-------------
Talking Point
-------------
Country Profiles
In Depth
-------------
Programmes
-------------
BBC Sport
BBC Weather
SERVICES
-------------
EDITIONS
Tuesday, 3 December, 2002, 17:00 GMT
Royal Mail attacks price cap plans
Post van delivering mail
Losing 1m a day
Royal Mail chairman Allan Leighton has told a panel of MPs that a planned stamp price freeze will delay the postal service's financial recovery.

Mr Leighton told the House of Commons trade and industry select committee that the proposals would cut the Royal Mail's revenues by 460m over three years, jeopardising its plans to return to profit by 2006.

"We are trying to turn this company round in three years. It's painful and we need some certainty," Mr Leighton said.

Under the price cap plans, put forward by the postal regulator Postcomm, the price of first and second class stamps would go up by one penny from next April, and would then be frozen until 2006.

Price battle

The Royal Mail, known briefly as Consignia, is pushing for more flexible pricing rules that would allow it to respond to unforeseen costs.

It argues that it needs more control over pricing in order to compete effectively as the postal service is gradually liberalised between 2003 and 2006.

Mr Leighton told the committee that the regulator should "give us the green light for the modest price package we have been advocating for nine months, and which is essential to the financing of our renewal plan".

The Royal Mail, hit by the rise of electronic communications and threatened by private sector competition in the lucrative express deliveries market, is operating at a loss of about 1m a day.

The company is planning to get itself back on track by cutting jobs and closing 3,000 urban post offices - about a third of the total network.

See also:

14 Nov 02 | Business
24 Oct 02 | Business
09 Aug 02 | Business
15 Jul 02 | Business
10 Jul 02 | Business
13 Jun 02 | Business
13 Jun 02 | Business
Internet links:


The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.


E-mail this story to a friend

Links to more Business stories

© BBC ^^ Back to top

News Front Page | Africa | Americas | Asia-Pacific | Europe | Middle East |
South Asia | UK | Business | Entertainment | Science/Nature |
Technology | Health | Talking Point | Country Profiles | In Depth |
Programmes