One Christmas won’t restore faith in Royal Mail

Dwindling standards cannot be blamed on the requirement to deliver letters six days a week

‘Without a marked turnaround it risks tumbling so far it could quickly become obsolete’

The fine line between optimism and reality is a tricky one for any organisation that finds itself under the microscope. So spare a thought for Royal Mail as management emerges from the festive period sounding like they overdid it on the sherry.

One can understand the desire of new boss Martin Seidenberg to inject some positivity into proceedings after a seemingly endless torrent of bad news, but the idea that Britain’s postal service is fresh from “delivering Christmas” for customers requires something of the double-take. Seidenberg deserves credit for recognising the “extraordinary efforts” of colleagues – being a postie is not an easy job and working at a company seemingly in a constant state of flux can’t be much fun these days. Morale is at rock bottom after years of bitter trade union-fuelled conflict.

Meanwhile, the prospect of steep first-half year losses of £169m being offset by an operating profit in the second-half is undeniably reason for cheer whatever the time of year.

Nevertheless, the German’s rather rosy assessment will jar with the experience of many households in recent months. It was the “best Christmas” for four years, Seidenberg said – over 99pc of first and secondclass items posted by the last recommended posting dates were delivered in time for Christmas. Leaving aside the fact that four years isn’t that long, the reality is that for many customers it is likely to have been a moment to forget on the postal front.

There were enough reports of dissatisfaction to fill an entire sorting office. A poll of 4,600 respondents conducted for The Telegraph in the run-up to Christmas found that almost half of the public had experienced delays. For a company that was warning of the threat of insolvency a few days ago, green shoots are to be welcomed but none of this should blur the bigger picture. One fleeting Christmas won’t restore the public’s faith, nor will it make a litany of long-standing problems suddenly go away.

Indeed, customers are entitled to be irked at the mere suggestion that Royal Mail is starting to turn a corner given its recent performance.

I lost count of the number of relatives and friends who said they had chosen not to send Christmas cards this year because of the double whammy of soaring stamp prices and dwindling service standards. That should concern Seidenberg greatly. One could see what he was driving at with recent remarks that £1.25 for a first-class stamp is “a pretty good bargain” to ship a letter “from Plymouth to Aberdeen overnight” but it was a tone-deaf attempt to win back hearts and minds. The cost of a first-class stamp has soared after three price rises in just 18 months, and was 70p as recently as 2019. Campaigners and consumer groups were rightly incensed at Seidenberg’s comments, particularly in the face of such a sharp deterioration in service.

The Royal Mail used to be one of our most revered national institutions. It was once a byword for trustworthiness and reliability – an organisation respected around the world. Not any more. Today the company is decidedly second-class in the eyes of the nation and without a marked turnaround it risks tumbling so far down the rankings that it could quickly become obsolete – that’s if it doesn’t go bust first. Indeed there is something that doesn’t quite sit right about the somewhat bullish tone of yesterday’s trading update given that Seidenberg had raised the spectre of a taxpayer bailout only 48 hours earlier in a letter to Liam Byrne, chairman of the business and trade select committee.

Responding to a series of tough questions on staff turnover, poor service, and accusations that parcels are being prioritised over letters, Seidenberg has again sought to pin many of its failings on the Universal Service Obligation (USO).

I have a lot of sympathy with the Royal Mail on this issue. A requirement to deliver letters six days a week feels desperately outdated, particularly – as Royal Mail never tires of highlighting – letter volumes are shrinking at shocking speed. Seidenberg insists it is “simply not sustainable” to maintain a delivery network built for 20bn letters when the company is now delivering only 7bn a year. He also points out that this will have fallen to 4bn within five years at the current rate of decline, and he adds that this is occurring at the same time that the number of addresses it has to service is increasing. These are undoubted millstones round the neck of an organisation attempting to compete with the might of Amazon, and other dedicated providers, in a rapidly growing parcels market.

Yet the USO is far from the only reason that Royal Mail is a shadow of its former self or that Britain is blighted by postal deserts so there is a risk that it over-eggs the pudding on that front.

Union bosses love a scrap, but Seidenberg’s predecessor Simon Thompson seemed to relish the confrontation, and the disruption from industrial action has led to a loss of market share as big retailers have jumped ship to rival couriers. A major cyber attack has damaged its reputation further, and it is facing a £600m High Court battle after logistics outfit Whistl (formerly TNT Post) accused the postal service of anti-competitive behaviour.

None of this can be blamed on a requirement to deliver letters six days a week, nor can Royal Mail rely on ministers to even contemplate anything as contentious as a watering down of its commitments when there is an election coming down the track.

Seidenberg can claim a decent start, but he needs to put some fresh ideas in the post.