Royal Mail bidder under pressure to cap price of stamps

[TopperGas]

https://www.telegraph.co.uk/business/20 ... -takeover/

The Czech billionaire bidding to buy Royal Mail is under pressure to cap stamp prices as Labour pushes for tougher concessions on the deal.

The Telegraph has learnt that ministers want Daniel Křetínský, known as the “Czech sphinx”, to rule out further increases to first-class stamp prices as part of his £3.6bn takeover.

They are also pushing for commitments on how much the tycoon will invest in postal infrastructure across the UK amid concerns of crumbling depots.

One source familiar with the discussions said Jonathan Reynolds, the Business Secretary, hoped to use the merger to secure a “big win” for the Labour Party.

Another said: “Reynolds wants to do a good job on this. He doesn’t want prices to go full runaway.”

The swoop by Mr Křetínský, who is bidding through his company EP Group, has sparked concern, largely because the deal would see the postal service pass into private hands – and foreign ownership – for the first time in its 500-year history.

The tycoon has already made a series of legally binding undertakings in an effort to ease these fears. They include maintaining Saturday deliveries for first-class letters, protecting the Royal Mail brand, and keeping the company’s headquarters and tax base in the UK.

Legal undertakings that have already been offered apply for five years, so any stamp price cap may follow a similar template.

First-class stamp price raised three times in a year
EP Group is also in talks with union bosses about a profit-sharing scheme that would see employees handed bonuses if the company meets key financial and delivery targets.

However, ministers are now keen to secure further commitments amid concerns that stamp prices will shoot even higher under the new owner.

Royal Mail has raised the price of a first-class stamp three times in the last year, blaming the increase on climbing costs as letter sending continues to decline. The latest increase, which came into effect earlier this month, raised the price by 30p to £1.65.

Mr Křetínský has previously refused to rule out further price rises, warning it was “simple maths” that the company had to stem its losses.

Second-class stamps are regulated by Ofcom, with the price pegged to inflation until at least 2029.

Discussions between ministers, union bosses and EP Group are said to have moved slowly in recent weeks. However, it is hoped that a deal could be secured before Christmas.

The negotiations also included conversations about the future of Royal Mail’s universal service obligation. Ofcom has put forward proposals to scrap second-class post on Saturdays to help the company save money and improve its quality of service.

Bosses have previously said that reform is vital to ensure the financial stability of Royal Mail, which lost £348m for the year ending Mar 31.

The Department for Business and Trade and EP Group declined to comment.

[Londonsburning]

In other words

"please stop charging the general public more and more and more money to send a letter, through the century old network that the general public and previous generations of their families paid for through taxes and hard work to enable because the government sold this institution for a pittance for a quick personal profit"

[GRS]

Can’t believe the people who matter can’t see that the continual price increase is purely down to pricing 1st class out of the market. Sure RM/Czechknob are saying that there will be a 6 day delivery of 1st class letters including Saturdays but it means jack if there aren’t any items that need that service because your customers have stopped using that service through force.

[datasaint]

Discussions between ministers, union bosses and EP Group are said to have moved slowly in recent weeks. However, it is hoped that a deal could be secured before Christmas.

The negotiations also included conversations about the future of Royal Mail’s universal service obligation. Ofcom has put forward proposals to scrap second-class post on Saturdays to help the company save money and improve its quality of service.

Why does there have to be any "deal"? The government are supposed to be reviewing the takeover under the "securities act", not dictating terms.

As for the USO Ofcom have already deferred a decision on that until mid 2025, by which point the takeover will have already gone ahead?

[fb1969]

Its doesn't matter if they make stamps 1p each or £10 each, it won't change the fact that RM don't give a sh!t about letters.

[oypostie]

Somebody tell the ministers that they already have a price cap on mail, albeit 2nd class, which their waste of space OFCOM set

[stevejm]

Would Kretinsky walk away? Finance/investment is a fluid space - he will invest where he thinks he can get the best return on his capital. Since Labour came in he has already seen those returns decrease what with higher Employer NICs and higher capital gains tax on share sales - he could go invest in a country with more enticing prospects for investors.

[jtshocka]

Good luck and feckin goodbye as if he's going to be a great benefactor for the workforce, look at his track record it's all for himself that's why he's a billionaire and this s**t union going to placate him