Advances in Regulatory Economics series
Edited by Michael A. Crew and Paul R. Kleindorfer
Chapter 22: Economic regulation and the UK postal sector, 2000–2011
In 1990, Royal Mail delivered 58 million letters each day and returned a profit of £30 million on a total letters’ turnover of £3.6 billion. By 2010, Royal Mail were delivering 71 million items per day but reported a loss of £333 million on a turnover of £6.6 billion. When the first Rutgers postal economics conference was opened at Rugby in 1990 by its former chairman, Sir Ron Dearing, Royal Mail was recognizably a leader in the postal world. Yet by the mid-2000s, Royal Mail was described by its then chairman as ‘a basket case’ (Leighton, 2011: 5). This chapter reviews the experience of independent postal regulation in the UK and evaluates the decisions of the Postal Services Commission (Postcomm) in respect of liberalization, downstream access and price control. It assesses the economic merits of the regulatory disputes that developed between Royal Mail and Postcomm over the 2000s, in the context of business performance and the broader governance design.
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