Royal Mail told it MUST keep Saturday post despite widening losses

Royal Mail’s plans to abolish Saturday deliveries have been blocked by ministers, despite the company’s mounting losses and concerns over the rising price of first-class stamps.

Secretary of State Kevin Hollinrake has told the 507-year-old company that the government has no plans to review the universal service obligation (USO), which requires it to deliver six days a week.

Hollinrake said in a letter to MPs on the business select committee: ‘Postal services have long played a key role in our society.

Being able to send and receive letters and parcels is important both socially and economically.

This is especially true for consumers who may be more vulnerable, such as those who are geographically or digitally isolated from their friends and family.”

It came after Keith Williams, chairman of Royal Mail’s parent company International Distributions Services (IDS), said “urgent” changes were needed in the USO to keep the company afloat.

It says the public no longer needs service six days a week because fewer letters are being sent.

Last year, about 7 billion letters were sent, compared to 20 billion in 2004.

And estimates suggest Royal Mail could save as much as £250 million a year if delivery were reduced to five days.

Williams has warned that if the government does not budge, Royal Mail would be forced to make ‘significant’ increases in the cost of a first-class stamp.

Royal Mail broke the £1 mark for the first time in April, raising the price from £95p to £1.10.

Royal Mail lost £1.04 billion for the 12 months to March 26, following a £250 million profit last year.

It said: ‘It is clear that when letter volumes have declined by more than 60 percent since their peak, universal service urgently needs to be reformed to be financially sustainable.’