Royal Mail In Stand-Off Over MPs' Inquiry

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By Mark Kleinman, City Editor

Royal Mail has been secretly resisting pressure from MPs for it to appear alongside rival postal operators as part of a new probe into competition in the industry.

Sky News has learnt that Royal Mail made representations to the Business, Innovation and Skills (BIS) Select Committee requesting that it should not be forced to give evidence during the sale session as Whistl and UK Mail.

Sources said that Moya Greene, Royal Mail's chief executive, would appear before the Committee on 26 November, adding that the MPs had refused to bow to the company's desire for it to appear separately.

Royal Mail boss Moya Greene is due to appear before the BIS committee

The row is the latest development in Royal Mail's efforts to persuade politicians and regulators to commit to reforms that it says are necessary to protect the Universal Service Obligation (USO), which obliges it to deliver to every UK address for a fixed price.

"This decision might make good theatre but it won’t make for good analysis of the issues," a source said on Friday.

The BIS Committee announced the launch of its inquiry in September following complaints from the privatised Royal Mail that its ability to meet its USO obligations is being undermined by the expansion plans of Whistl, the rebranded TNT Post.

Sky News also understands that Dave Ward, a senior official at the CWU union, has also been asked to appear before MPs this month, while Ed Richards, Ofcom chief executive, will give evidence in early December.

The hearings will mark the latest phase of an intensive period of lobbying by Ms Greene, who has been vocal in her criticism of the industry's regulatory regime.

Last month, she and her chairman, Donald Brydon, attended an Ofcom board meeting to warn that a review of postal markets planned for the end of next year must be accelerated to safeguard the USO.

Since listing on the stock market as part of its contentious £3.3bn privatisation last year, Ms Greene has complained that Whistl's expansion plans could cost Royal Mail £200m in lost revenue by 2017.

Ofcom is expected to decide whether to bring forward its assessment shortly.

Reiterating previous statements on the issue, a spokesman for the regulator said: "Protecting the universal service is at the heart of Ofcom’s work, and our own evidence clearly shows that the service is not currently under threat.

"We are listening to the views of Royal Mail and other parties regarding competition in the market. We would assess any emerging threat to the service quickly, in the interests of postal users."

Royal Mail's shares have had a bumpy ride since last autumn's sale by the Government.

They initially surged, leading to accusations that Vince Cable, the Business Secretary, had cost the taxpayer £1bn by underpricing them.

However, the UK regulatory framework, an impending financial settlement with French competition authorities and the growing impact of greater competition - exemplified by Amazon UK's recent launch of a same-day delivery service - have weighed on Royal Mail shares in recent months.

On Friday, they were trading at just over 462p, down 20% during the last 12 months but exactly 40% higher than the price at which they floated last year.

Taxpayers continue to own 30% of Royal Mail, although there is little prospect of a sale of the remaining shares ahead of next year's General Election.