RUTH SUNDERLAND: Royal Mail reform is in the post

As the election hoves into view, there is a tang of national self-sabotage in the air and a feeling of daily life falling apart.

The root of it is lack of energy and leadership in Government.

On the stock market, it was galling to see Arm Holdings soar to a premium last week with its shares trading in New York.

Failing to persuade Arm, a company with British roots, to float in London was a spectacular own goal. But still the Government moves at a snail’s pace on the reforms needed if the City is to remain a world-class financial centre.

At a far lowlier level chez Ruth, domestic life is a tsunami of irritation. Bin collections are missed. Roads are full of potholes. Family visits are disrupted by train strikes. Dealing with NHS admin is almost more stressful than being ill. Don’t even think about trying to phone HMRC about the new tax code. To cap it all, Christmas cards were arriving in January, maybe some are still en route.

Set in stone: There are solutions that could restore our postal service to a functional and reliable system

The state of the post is an exemplar of the national malaise, the sense that nothing works any longer, even though everything costs more.

The price of a first class stamp has doubled, but the Royal Mail is still failing to hit its delivery targets. An army of small investors would, if they had held shares since the float in 2013, have seen their investment fall by 40 per cent. 

There are solutions that could restore our postal service to a functional and reliable system but not if the Government continues to stymie efforts by the new chief executive, Anglophile German Martin Seidenberg, to sort out the mess. Reform has already taken place in most comparable countries but not here, largely because of the pusillanimity of our politicians.

Regulator Ofcom earlier this year put forward suggestions for putting Royal Mail on a sounder footing.

Rishi Sunak immediately waded in to say he would not countenance scrapping Saturday delivery, one of the proposals.

In fact, Saturday delivery could be preserved. A solution more likely to find favour with Seidenberg is to carry on delivering six days a week, but to bring in a slower service for what is now second class post.

This could be combined with a premium fast-track service for letters that need to be delivered the next day, at a higher price than now. That way, urgent letters would arrive quickly.

The feeling at Royal Mail, based on soundings of customers, is that people would be happy if non-critical mail took a little longer, provided it arrived when expected. Even the militant unions might be placated if there was a clear blueprint that protected as many of their members’ jobs as possible.

No one wants to see the post in this country go the way it has in Denmark, where the universal service obligation – the carrier has to deliver for the same price everywhere, no matter how remote – was abolished in January this year. But the longer the current stalemate goes on, the more likely it is that the letter service will collapse.

Large investors, including so-called Czech Sphinx Daniel Kretinsky, are apparently not pushing for a break-up of the parcels business GLS from the Royal Mail, but their tolerance has its limits. The endgame would be huge taxpayer subsidies of the letters business, or renationalisation. 

Royal Mail is operating on a business model designed for volumes of 20billion letters a day. That has dropped to 7billion and will go down to 4billion in a couple of years. 

Fixed costs, including 36 flights in the UK per day carrying mail to far flung parts of these islands, remain the same. The Government, and the Labour party, need to recognise that is unsustainable.

This post first appeared on Dailymail.co.uk