Royal Mail boss blasted by MPs as losses head towards £750m

The boss of Royal Mail has been blasted by MPs over his running of the crisis-hit company as losses head towards £750million.

In a bruising appearance before the Commons business committee, Simon Thompson was quizzed about strikes as well as his £140,000 bonus and plans to stop delivering letters on a Saturday.

Committee chairman Darren Jones said his answers raised ‘grave concerns’ over the running of the business.

Thompson, chief executive of Royal Mail parent International Distributions Services, was even reminded that misleading Parliament would ‘not be appreciated’ and warned he could be called in again. 

The hearing came after a torrid few months for Royal Mail as strikes crippled the company over the crucial Christmas period and a Russian cyber-attack knocked out its overseas delivery operations.

Thompson warned that the company’s losses of over £1million per day were ‘unsustainable’ and Royal Mail faced an ‘urgent situation’ about its future.

The £1million figure related to losses of £90million in the first quarter. 

But analysts now believe losses for the full year to the end of March will hit £745million – equivalent to more than £2million a day. 

Meanwhile, Thompson said Royal Mail was looking to create a ‘viable’ change to its Universal Service Obligation (USO), a legal requirement for the group to deliver letters six days a week and parcels five days a week. 

He highlighted an Ofcom user needs review conducted in 2020 that concluded a five-day service would meet the needs of ‘97 per cent of people’.

The push to change to USO forms part of his strategy to overhaul Royal Mail. But the plans have angered the Communication Workers Union (CWU). 

Earlier at the committee hearing, CWU general secretary Dave Ward accused Royal Mail of ‘waging war’ on its workforce.