Christine Buckley, Industrial Editor
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Royal Mail is facing action from the postal regulator after a complaint from DX, one of its rivals, that it had breached pricing regulations.
Postcomm is due to make a formal ruling in the next few weeks, but the regulator has already outlined concerns over a new service that operates in DX’s area.
As the dominant incumbent, Royal Mail is not allowed to lower its prices selectively because that impedes emerging competition. Instead, if it lowers prices it has to offer those prices to everyone. DX argued that it had circumvented this by creating a new service and arguing that this served a niche market, rather than a broad one.
A spokesman for DX said: “DX remains very concerned about anti-competitive behaviour by Royal Mail and urges Postcomm to act decisively to meet their statutory duty to promote competition.”
Last year Royal Mail was fined £1 million by Postcomm for failing to ensure that it did not gain an unfair commercial advantage over its competitors in the “access to the last mile” market.
The move came after complaints from three of Royal Mail’s competitors at the time – Express, the dairies business, TNT and UK Mail – who said that they had been hampered in getting uniformly priced access to the final-mile delivery, which is carried out by Royal Mail postmen.
Two years ago the regulator found that Royal Mail’s advertising had breached competition regulations.
A spokesman for Royal Mail said of a potential censure from the regulator: “Royal Mail is operating in a fully competitive postal market and, in developing new products to meet the needs of our customers, Royal Mail’s approach is to ensure that we have fair, cost-reflective prices.”
Potential action from the regulator, which could involve a big fine, looms as Royal Mail faces another national strike this week in a pay dispute. The second walkout in an increasingly bitter dispute will begin on Thursday evening and will last for 24 hours. The timing is aimed to create maximum disruption in the run-up to the weekend.
The Communication Workers Union has asked Allan Leighton, Royal Mail’s chairman, to come to talks before the next walkout, but the union emphasised that new negotiations would be possible only if the postal group made a fresh pay offer. The existing 2.5 per cent increase was rejected by 77 per cent of CWU members in the strike ballot.
So far Royal Mail has said that it cannot afford to increase the offer. Talks at the conciliation service Acas have also failed to resolve the dispute. It is also likely that the CWU will set further strike dates tomorrow when the union’s ruling executive meets.
The last national postal strike 11 years ago stretched over several months.
Postal workers will demonstrate tomorrow outside the European Parliament in Strasbourg as it votes on Europe-wide proposals to remove all protections from incumbent postal operators and deregulate the market. European unions fear that full deregulation would lead to job losses and poorer postal services.
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Martin from London, you got the poor service, is Royal Mail or postman fault ? who is not doing his job? But Crozier still manage a 65% bonus. And postman has 95 pences
sean, northampton, uk
Last week Royal Mail announced bonuses for all it's managers. These range from 5% to 12% depending on grading and location. RM executive Adam Crozier recently had a 65% bonus.
In this light would you settle for 2.5%?
Philip Blow, Cambridge, UK
as a postman i fully agree that royal has to modernize ,but not at the expense to its loyal employees .
our competitors are laughing at us they can undercut us and we can do nothing , come on the powers that be take this stupid regulation off us this is not fair competion.
lee, tewkesbury, uk
Would you openly welcome being asked to do more for less without a fight?? There is currently not a level playing field and the public need to understand the full facts rather than the biased view currently portrayed by the media.
Pau1, Langford, England
Postman are striking NOT because we think its fun, or enjoyable, but it is a last resort, sorry Mike, also because, Royal Mail wish to stop night sorting within deliveries, where most of your mail is sorted to the delivery, a loss of night allowance. Have delivery staff come in later, a part early shift allowance lost. Increase the leaflets postman HAVE to deliver from a max of 3 to 5, but only pay the postie for 3. Cover postman's deliveries, sort, prep, and take part of the delivery out, WITHOUT getting paid to cover the extra work, as well as prep, and deliver their own delivery.. And yes most posties i know would have accepted the 2.5%.offer, but with those strings, no chance.
Royal Mail MUST stay owned by the state, but our boss the government neglected to re-invest some of the profits Royal made over decades. They lacked the challenge of standing up to Europe demanding opening up of the postal market. And fail to condone Europe's postponed deregulation.
t-c, Portsmouth, Hampshire., Great Britain.
If Royal Mail's plans are pushed through, do the general public realise that the later deliveries they are getting in some areas at the moment will become the norm all over the country, as a direct result of posties being forced by Royal Mail to start work later ? Far from receiving a pay increase, the removal of an 'early start' allowance will, in fact, result in a nett loss of pay for the individuals, even after the 2.5% increase is applied. The plans they have for the business also mean the last collection time will be so early in the day in some places that anyone wanting to have a letter delivered the next day will have to get out of bed before their postman does to post it ! How is this an improvement in the service to the customer ?
Simon, London, UK
I really feel that postal workers are shooting themselves in the foot by striking at a time when the entire UK postal industry is in a state of reform.
It's not about pay cuts, it's about making the Post Office leaner and more efficient to survive deregulation. Postal workers have been some of the most protected, and well fed workers over many years. Now the going is getting tougher, they might as well be rearranging deckchairs on the Titanic each time they go into work.
K Shivji, London,
can you explain wot compertion is? the was i see it it only compertion when royal mail is aloud to compeate by offering lower prices im they want and offer wot ever service u they want to. y should royal mail do all the hard work delivering letters to every door in the uk every day. when no other company will/can. than compedatiors should grow up and and if they want to compate get there own srvice up and running and only then will every one see wot a graet job royal mail does and wot value u get for ur money
bob, portsmouth,
So Mike, TNT etc. are going to deliver letters in rural areas?
I don't think so.The word "cherrypicking" comes to mind.
The postal workers are trying to make aware to the public that
the whole postal service which the public now enjoy is under threat.
In fact the actual cost of sending a letter anywhere would increase not decrease.
john, shrewsbury, uk
Most people can only afford to post there letters at the cost of a first class stamp. Unfortunatley if your suggestion comes to effect the first class stamp will become part of history. Maybe before you make suggestions in regard to this service that you consider the the impact it would have to the everyday user of the UNIVERSAL postal service. The only winners of doing it your way are big businesses.
shelley johnson, Gillingham, Kent
The logical outcome of the irrational demands placed upon the Post Office/Royal Mail is a network of Post Offices providing a post restante service for ordinary mail, and a "Parcel Service" for all "delivered" items, provided by Parcelforce and the competitors that are so hysterically advocated.
At the current rate of closure*, the Post Restante Offices would be in market towns, i.e. within 20 Km (12.5 miles) of everyone.
*Closures are predicated on the transfer of counter services away from the Post Office and the privatisation of any innovative service introduced by the Post Office thereby rendering counter services uneconomic.
John Camus, Colchester,
I assume Mike of Wrexham will not mind collecting his mail from a central point if Royal Mail is privatised, as this will be the likely consequence. Social mail is not profitable, it is the business side that competitors are most interested in and the public will pay the price. We are already seeing the closure of our Post Offices at a cost to rural areas, and indeed towns and cities. Furthermore, the strike is NOT about wages, it is about the unacceptable working practices Royal Mail want to inflict on their staff. Automation needs to be brought in, but for the good of the employees and the public.
sophie, norwich, uk
I do find it amazing that the CWU don't realise they are the ones killing off Royal Mail. All this strike actionis just going to push customers to the other offerings and away from RM.
Mark, Sutton, UK
Get real Mike, these other firms only wanted the profitable business mail,not to deliver the mail to every address in the land at a uniform rate. Deregulation? Ah yes, that was what Mrs Thatcher gave to the whole country (except London) namely the bus services fiasco.
Brian, Liverpool,
It has taken me TWO MONTHS to get a new POp set up via Royal Mail after our business moved address.
In this modern dotcom world it seems rules, ancient process and raw unwillingness allow RM to just allocate the existing PO Box number to a new delivery office and one has to complete a new application and pay again just to move an existing service.
Were there another company offering the same service I'd have given up and changed provider.
Martin, London,
I Know! Why not blame the workers again?
After all why shouldn't they take a pay cut so that Leighton and Crosier can have a another fat-cat bonus?
All I can say is...
"REMEMBER LEEDS UNITED, THEIR FINANCIAL PLIGHT WAS ENTIRELY DUE TO THE CURRENT LEADERSHIP OF ROYAL MAIL!"
Paul, Shiremoor, North Tyneside
Unfortunately we are now being threatened by strikes by Royal Mail employees. The only long term solution must be to put full deregulation in place so other firms can take over mail delivery.
Mike, Wrexham, Wales, UK