Union appears to support Royal Mail proposals to end Saturday post

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Firms are set to face higher payroll costs as the minimum wage is reportedly set to increase by more than six per cent at Wednesday’s Budget.
Firms are set to face higher payroll costs as the minimum wage is reportedly set to increase by more than six per cent at Wednesday’s Budget.

Union bosses have said they are prepared to support reforms to Royal Mail, which would allow it to implement historic cuts to postal services and an end to six-day-a-week letter deliveries. 

The Communication Workers Union (CWU), which was previously against Royal Mail’s efforts to reduce deliveries, has acknowledged the financial challenges facing the current service.

Royal Mail has been seeking to reform the Universal Service Obligation (USO) by transitioning to delivering second-class post only every other day while also slowing down the delivery speed of bulk business mail to second-class standards.

Martin Walsh, deputy general secretary of CWU, addressed the union’s national conference in Bournemouth last week. He said: “The reality is, the USO as a six-day option is no longer financially viable.

 “The challenges we face are so significant — probably the most challenging time in this union’s history,” he added. 

Union sources refused to support an end to first-class mail deliveries on Saturday, The Sunday Times reported, but this could force a steep rise in first-class stamp prices.

Royal Mail must still gain approval for their proposals from ministers and industry regulator Ofcom. Previously, Ofcom has called for a “national debate” on the future of the UK’s postal service.

Kevin Hollinrake, the government minister for postal affairs, said: “There is no done deal here and, as far as we are concerned, the USO remains and we are not aware of any recommendations [by Ofcom] to change it.”

It comes as Royal Mail is also facing a sale or possible takeover.

Earlier this month, a major European conglomerate led by Daniel Křetínský, who is known as the Czech Sphinx, made a £3bn bid for Royal Mail’s parent company International Distributions Services (IDS).

IDS’s board rejected this proposal, but EP Group is open to further discussions.

Kretinsky is Royal Mail’s largest shareholder, with a 27.5 per cent stake. He is reportedly being advised by former shadow business secretary Chuka Umunna, now a senior banker at JP Morgan, according to The Telegraph.

Umunna, said to be brokering a relationship between Labour and Křetínský, has sparked criticism from the CWU, which branded his involvement as “corporate sleaze.”

JP Morgan and Labour have declined to comment.