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Martin Vander Weyer

How to save Royal Mail

How to save Royal Mail
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The government’s ‘cost-of-living tsar’, Just Eat co-founder David Buttress, was appointed last month as a Canutian gesture against the inflation tide. He says his role is to encourage retailers and utilities to offer discount deals that might relieve short-term pain for consumers. But wouldn’t it be good if he also had powers to shame companies or sectors for profiteering by whacking their prices up far ahead of inflation? Any firm for which energy or scarce raw materials are major cost elements has possible reason for scorching price rises; many others do not.

Buttress could start by looking into hire-car rates, which have doubled (and more) across Europe since 2019 – stinging holidaymakers who prefer to brave airport queues rather than endure Channel port gridlock in their own cars. International operators such as Avis, Europcar, Hertz and Sixt offer the excuse that having reduced their fleets during the pandemic, they can’t rebuild them fast enough to meet summer demand because global microchip shortages have restricted supply from car factories.

These companies used to be able to buy new cars at deep discounts and sell them profitably at the end of the season. Now they have to pay a premium and bear the depreciation – and have fewer hires in total across which to spread their overheads.

OK, so their costs have gone up a bit. But sufficient to justify a hire-fee increase for a family runabout from around €35 per day to more like €100? Or are they by any chance price-matching upwards to the highest level at which customers, confused by many differing inflation signals, will shrug and hire the car anyway? If you think you’ve spotted opportunist overpricing in other sectors, email martin@spectator.co.uk.

Merci beaucoup

Sizewell C nuclear power station on the Suffolk coast – for which Business Secretary Kwasi Kwarteng has given the go-ahead against the advice of the Planning Inspectorate and the cries of local campaigners – will be capable, we’re told, of meeting 7 per cent of UK electricity needs. Less exciting news is that it probably won’t start generating in my lifetime, while domestic energy bills will rise even higher in the meantime to make consumers share the financial risk of this £20 billion project. Nevertheless, in the absence of other viable or politically acceptable technologies that can provide steady baseload power (as opposed to variable output from wind and solar) on such a scale, it must be the right thing to do.

And the irony is that if it does get done, we’ll have the French government to thank. The developer, French nuclear utility EDF, is about to be renationalised after a rocky passage of part-privatisation, political rows and technical hitches that has left its balance sheet weak and private shareholders unhappy.

State ownership should stabilise EDF – and Sizewell will essentially replicate EDF’s Hinkley Point reactor, due for completion in 2027 and part-financed by China’s state nuclear company. But as Chinese money is barred at Sizewell, other infrastructure investors (from Canada and Australia as well as the City) will rely on EDF’s good standing rather than the blandishments of the dozen secretaries of state who will hold office between now and switch-on date.

We may curse the French for failing to staff their Dover passport booths, but one day we’ll say merci beaucoup for keeping our lights on.

Blessed postmen

I’m struck by parallels between the Church of England and Royal Mail. Both institutions are embedded in our social fabric yet strangely reluctant to play that role in modern Britain. Both have leaders who communicate no coherent vision. Neither seems to value their key workers, whether parish priests or posties. And both are fading in significance, having failed to consolidate the opportunity of the pandemic when their role might have become all the more central.

But if the Church is currently quiescent, it’s all kicking off at Royal Mail. After the Communication Workers Union voted for strike action, management retorted with a threat to split off GLS, the profitable international parcels business, from the troublesome domestic universal-delivery service which is driving losses of £1 million a day after a period in which productivity has ‘gone backwards’, according to chief executive Simon Thompson, amid worsening labour relations. Local service cutbacks, like parish church closures, must follow.

To which my man in the sorting office with a big trolley says: ‘This is what happens when you forget your core business… All the energy went into GLS while successive managements hoped [domestic] Royal Mail would muddle through, old-fashioned and unloved. Compare Deutsche Post DHL, a privatised jewel of German industry and a technology leader as well as a vital national service. In Germany, the dominant union is a partner in the business. In Royal Mail, managers and unions despise each other – and there’s a history of management greed over bonuses that makes matters worse.’

But can Royal Mail ever be turned around, I ask my source, or is the future all about gig-economy white-van men with dodgy satnavs? Oh yes, he says passionately, ‘If you can restore pride, be clear about what you do – connecting every house and business every day – and have the humility to realise it’s all about postmen and women, not management structures, it can be done!’ I’ve told him he ought to be a bishop.

Cabbage salad

Owen Matthews, our fine contributor on Putin’s Russia, has an offbeat suggestion for my sub-£30 lunch search: the George Hotel at Lviv in western Ukraine, which offers late Habsburg grandeur, cheap bedrooms, a view of the city’s monument to the romantic Polish poet Adam Mickiewicz and an ‘everyday menu’ of green borscht, Kyiv cutlet and cabbage salad for a little over £10.

Written byMartin Vander Weyer

Martin Vander Weyer is business editor of The Spectator. He writes the weekly Any Other Business column.

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