Czech billionaire Daniel Křetínský, who acquired Royal Mail's parent company, International Distribution Services, for £3.6 billion last year, has robustly defended the postal service against claims of deterioration. In a tense session with the business select committee, Křetínský expressed deep regret for any delayed letters but maintained that Royal Mail is performing a task unmatched elsewhere in Europe.
MPs Challenge Service Standards
Committee chair Liam Byrne opened the hearing by revealing that Royal Mail is projected to deliver 220 million letters late this year out of a total of 5.6 billion. He pressed Křetínský to apologise for what he termed a "decline in Royal Mail services," citing issues such as late Christmas deliveries affecting 16 million people and recent stamp price increases from £1.70 to £1.80.
Křetínský's Defence of Royal Mail Operations
Křetínský, often called the "Czech Sphinx" for his enigmatic style, delivered a spirited rebuttal. He argued that the UK's expectations for next-day delivery at low costs are exceptionally high compared to European counterparts. For instance, he noted that in Italy, first-class letters cost €5.50 (£4.76) with only an 80% delivery target, whereas Royal Mail faces stricter demands.
He emphasised the logistical challenge, stating, "This is a hard job, this is a job that nobody else in Europe is doing. If you send a letter from Brighton to the Scottish Highlands you need to get it there for £1.80 the next day."
Regulatory Changes and Service Targets
From next week, Ofcom will ease pressure on Royal Mail by lowering its universal service obligation targets. First-class mail will only need to be delivered within one working day 90% of the time, down from 93%, while second-class mail targets drop to 95% within three days from 98.5%. Křetínský highlighted that even these reduced standards are currently being missed, underscoring the service's struggles.
Denial of Prioritising Parcels Over Letters
Křetínský firmly denied allegations that Royal Mail is favouring more profitable parcels over letters, a claim supported by testimony from postal workers read out by Byrne. He acknowledged that during crises, such as staff shortages, temporary prioritisation might occur to clear backlogs, but insisted this is not official policy.
He also pointed to competitive disadvantages, noting that rival parcel firms often have lower labour costs due to not offering full employment, and called for government action to improve conditions for drivers in the sector.
Broader Context and Future Outlook
The takeover has been marked by conflicts with trade unions over working conditions and ongoing public dissatisfaction. Křetínský's appearance before MPs comes as Royal Mail navigates these challenges while adapting to new regulatory frameworks. His comments reflect a broader debate about the sustainability of postal services in an era of rising costs and evolving consumer expectations.
