Management gets extra points too for announcing the ploy just as many households begin to think about writing this year’s batch of Christmas cards. According to a recent analysis by The Telegraph, a first-class stamp is now so expensive that it would be cheaper to fly to some European cities to post Christmas cards. Some may be considering emigrating just to avoid ever having to wait for a Royal Mail parcel again.
Businesses undoubtedly have every right to feel angry about the Chancellor’s giant tax grab. It is short-sighted. Nor is it unreasonable to question why the introduction of a lower-earnings threshold can’t be phased to mitigate the impact.
To be entirely fair to the Royal Mail, it is not alone in spelling out the fallout, but at least the retail sector is only speaking in generalities when it warns that Reeves’s measures will “make job losses inevitable and higher prices a certainty”.
With the Budget a mere three weeks old, the sheer speed with which Royal Mail appears to be preparing to pass on the cost hikes smacks of bear-faced opportunism. According to chief executive Martin Seidenberg, “it’s not just about consumer stamps. We are looking at all products … that includes parcels and also business mail”.
Brace then for these price rises to be unapologetically implemented as fast as management can possibly get away with. This, from a company, where service standards and quality have declined to such an extent that postal regulator Ofcom was compelled to issue it with a £5.6m fine last year for failing to meet delivery targets.
A cynic might wonder whether the eye-watering cost of a looming debt-fuelled takeover of the Royal Mail at the hands of Czech private equity tycoon Daniel Kretinsky is an influencing factor.
After all, this is a heavily loss-making organisation that is already carrying billions of debt. It can ill afford for that burden to increase, nevermind to the extent that it is set to under Kretinsky’s buyout. Backed by £2.3bn of debt financing, the £3.6bn takeover will leave the Royal Mail juggling hundreds of millions of pounds more each year in interest payments.