Letter states Royal Mail takeover will be ‘properly scrutinised’ as Labour supports small businesses
Support for small businesses as “the beating heart” of the UK economy has been promised by new business and trade minister Jonathan Reynolds MP in a letter to the GCA.
And he confirmed the new Labour government will “properly scrutinise” any Royal Mail takeover to secure appropriate guarantees to ensure the commitment to the universal service obligation (USO).
The letter, which arrived on Thursday, 29 August, comes as the greeting card industry prepares for the GCA AGM & Annual Conference on 19 September – some tickets for the event at the Bristol Harbour Hotel are still available – where David Gold, RM’s director of external affairs and policy, will be sharing the 508-year-old firm’s plans for the future, including the upcoming Christmas season, and is keen to hear members’ concerns over the postal service.
After the general election in July, GCA CEO Amanda Fergusson had written to the new minister on behalf of a coalition of concerned organisations, British Independent Retailers’ Association, Booksellers’ Association, National Federation Of SubPostmasters, Voice Of The Postmaster and Bookshop.org, welcoming him to the job – and demanding the government saves the UK’s postal service.
Jonathan’s response said Labour will be “supporting small businesses – who are the beating heart of our economy”, and he thanked Amanda for setting out the coalition’s views of the potential takeover of Royal Mail by Czech billionaire Daniel Křetínský and his EP Group.
The total £5billion deal, made up of £3.5bn in cash plus assumed debts, has been accepted in principle by the postal service’s owner International Distribution Services (IDS), but the new government has called in the takeover, which still has to be ratified by shareholders, for an investigation under the National Security & Investment Act, with the probe expected to take at least until October.
Ofcom also has yet to release the outcome of The Future Of The Postal Service review from earlier this year, in which the industry watchdog and RM originally proposed losing Saturday letter deliveries altogether, which requires an act of parliament to change the legally-binding USO of six-day deliveries for the same price anywhere across the UK.
This was then dialled back to keeping a six-day first-class service while cutting second class to two or three days a week, which RM claims meets the terms of the USO so no change of law would be necessary, however, Ofcom has launched an investigation into Royal Mail’s failure to meet its delivery targets in 2023-24, the second year running it has significantly under-performed.
In his letter, the minister took on board the importance of a reliable and affordable USO to the UK businesses “that help drive growth in communities across the country” and promised “the Government will ensure that any proposed takeover is properly scrutinised and that appropriate guarantees are
forthcoming that protect the interests of the workforce, customers and the country”.
He said he has met the man known as the Czech Sphinx due to his inscrutable business demeanour, and discussed the bid and the government’s expectations for a takeover “including the need to ensure the long-term financial success of Royal Mail, their commitment to the universal postal service and protecting the interests of workers and users who rely on its services”.
Jonathan also recently met IDS CEO Martin Seidenberg, who recognised that there was more to do to meet its obligations and improve the quality of service to customers and, with regard to Ofcom’s review, he added: “The Government cannot pre-empt the work of an independent regulator, but we will consider carefully any conclusions and recommendations that Ofcom puts forward in due course.”
Daniel Křetínský has committed in writing to keeping the USO for five years, but expanded on that promise in an interview with the BBC in July when he said: “Royal Mail is going to be the provider of USO so in the UK, I would say forever, as long as the service is going to be needed, and as long as we are going to be around,” adding that he “completely excluded” walking away from the USO “as long as I’m alive”.
Amanda said: “There continues to be widespread concern about the impact on small businesses and consumers following proposals for change in the postal service from Ofcom and Royal Mail.”
She added that questions for David Gold to answer at the annual conference at the Bristol Harbour Hotel are welcome, and should be sent to amanda@gca.cards.
Tickets are still available for the event – but get in quick – where the speakers include James Taylor, commercial director at Cardzone; Ohh Deer co-founder and md Mark Callaby; James Ellis, owner James Stevens; and Jon Hendy, Kantar’s business unit director who will deliver 2024 consumer insights.
The AGM and conference is on Thursday, 19 September, and association members can book their tickets for both the event and the fun networking drinks the evening before, kindly sponsored by Ling Design and Emotional Rescue, next door to the venue at Dirty Martini Bristol from 6pm.
