Daniel Křetínský, the Czech billionaire who bought Royal Mail’s parent company for £3.6bn last year, has insisted that service has not declined under his ownership, despite heavy criticism of late deliveries and price rises.
In a defensive and sometimes impassioned performance in front of MPs on the business select committee, Křetínský said he was “deeply sorry” for any letters that arrive late.
Since his takeover, Royal Mail has battled trade unions over working conditions, raised first-class stamp prices from £1.70 to £1.80 and delivered 16m Christmas letters late.
But Křetínský hit back at a string of complaints listed by members of the committee, including that service is getting worse and that more lucrative parcels are being prioritised over letters.
With a week to go until Royal Mail’s service targets are reduced by the regulator Ofcom, he also said the UK’s expectations remain far higher than those in other European countries.
The committee’s chair, Liam Byrne, began the session by saying that the company was on track to deliver 220m letters late this year, of a total of 5.6bn.
He asked Křetínský, who made much of his fortune from oil and gas, to apologise for the “decline in Royal Mail services”.
But the investor, known as the “Czech Sphinx” for his supposedly inscrutable demeanour, defied the nickname to issue a pugnacious defence of his record, blaming a number of external factors.
These included the UK’s comparatively high expectations for next-day delivery at relatively low prices.
“This is a hard job, this is a job that nobody else in Europe is doing,” he said.
“If you send a letter from Brighton to the Scottish Highlands you need to get it there for £1.80 the next day.”
He said that in Italy, first-class letters cost €5.50 (£4.76) and that regulators there only required delivery targets to be met 80% of the time.
From next week, Ofcom will ease pressure on the postal service by lowering the Royal Mail’s targets under the so-called “universal service obligation”.
It will only be required to deliver 90% of first-class mail within one working day (instead of 93%), and 95% of second-class mail within three days (instead of 98.5%). The Royal Mail is missing even the reduced targets at the moment.
Křetínský also denied the service was prioritising more profitable parcels over letters, after Byrne read out testimony from postal workers claiming that this is the case.
“This is not an isolated pattern, this is a national breakdown in the service,” said Byrne.
The billionaire said this may have happened in crisis moments when delivery offices needed to clear blockages or delays caused by staff sickness, but was not policy.
He also said it was unfair that the Royal Mail was expected to compete on parcels with businesses that do not offer staff full employment and whose labour costs were half those of the Royal Mail as a result.
Křetínský said he would welcome government measures to improve employment conditions for parcel drivers working for other firms.
