Royal Mail issued its proposal in response to the regulator's plan to allow a 1p rise, but only if the rise is part of a package of tight constraints. Royal Mail has already condemned Postcomm's plan, which its says could fatally undermine the company's recovery plan to cut losses of 拢1.1m a day and return to profitability.
Royal Mail chairman Allan Leighton warned the regulator that if it does not put forward what he calls a "straightforward regime", he will demand a referral to the Competition Commission. The Royal Mail is also unhappy at the length of time it is taking to get a price rise through.
"We're running out of time," Leighton said. "The regulator's approach is threatening Royal Mail's entire recovery plan and the future of the services our customers rely on. Everything with this regulator is painfully slow."
Leighton said that, in the nine months since the Royal Mail first proposed its 1p price rise on First and Second Class basic stamps, the regulator's approach had resulted in nothing more than a set of complicated and damaging proposals that were totally unacceptable "flawed and disastrous in their impact".
"My message to the regulator is very simple: Give us the green light for the modest, simple price package we have been advocating for nine months and which is essential to the financing of our renewal plan, take us off the regulatory treadmill and let us get on with running this company without these constant diversions into debates on company structure or regulatory theory," he said.
Postcomm's pricing proposals turn the effect of a penny rise in postage rates from 拢510m additional revenue over a three-year period, into a 拢460m revenue black hole over the same period.
Royal Mail's proposals say that a sensible price control needs to pass three tests:
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