Royal Mail has threatened more stamp price hikes after a £120million national insurance hit in the Budget.
Martin Seidenberg, boss of the postal giant’s owner, also refused to rule out further job losses as a result of the increased cost. “We are looking at all areas of the business,” he said. The possibility of yet more stamp price rises is a blow, given a surge over recent years. The price of a first class stamp has jumped to £1.65. When Royal Mail was privatised just over a decade ago it was 60p.
Mr Seidenberg, chief executive of parent firm International Distribution Services (IDS), said measures from Rachel Reeves’ maiden Budget last month will “hit us harder compared to our competitors”. The company, which employs around 130,000 workers in the UK, said the jump in costs meant reforms to its universal service obligations - which currently requires it to make first-class deliveries six days a week - are “more urgent”.
Asked about possible impacts from the £120million hit, Mr Seidenberg said: “We are looking at a bunch of measures. It is too early to say but we will look at prices and cost efficiencies. I cannot rule out any price increases.” When asked whether it could lead to job losses, he said it was “too early to say” but would not rule it out. Mr Seidenberg said the company could look at increasing automation.
He also admitted Royal Mail was likely to miss delivery targets for letters and Christmas cards over the three months that include Christmas. However, he insisted its performance over the festive period itself would be better than last year after taking on thousands of staff.
In September, Ofcom said it is considering allowing Royal Mail to ditch Saturday deliveries for second class letters as part of the consultation. It came as IDS improved its profitability over the past half-year and hailed progress in its major transformation plan. The company has undergone a major overhaul which saw it axe thousands of jobs from 2022 as Royal Mail was impacted by industrial action.
IDS is awaiting approval over its proposed £3.57billion takeover by Czech billionaire Daniel Kretinsky. It reported an adjusted operating profit of £61million for the 26 weeks to September 29, up from a £169million loss a year earlier.