Committee publication · Correspondence · 19 May 2026
Additional written evidence from CWU on Royal Mail
From: Business and Trade Committee
Inquiry: Royal Mail
Summary
The CWU submits additional evidence to the Business and Trade Committee on Royal Mail's financial sustainability. It argues that Royal Mail loses money delivering to remote areas (Cornwall, Isle of Wight, Highlands, Islands) and is forced to accept low-priced parcel contracts from Amazon and other couriers to offset letter-delivery losses. The union calls for a network fund rather than subsidy or renationalisation, contending that Ofcom's regulation ignores Royal Mail's structural disadvantage against globally-subsidised competitors using bogus self-employment.
Key findings
- Royal Mail makes significant losses delivering to remote areas: a first-class letter from Land's End to John o' Groats costs ~£30 to deliver but the stamp price is £1.80; this cost is rising to £35.
- Royal Mail lacks commercial negotiating power against trillion-dollar companies like Amazon and is compelled to accept below-cost parcel contracts to partially subsidise universal service obligations across 32 million addresses daily.
- Competitors (Evri, Amazon) undercut Royal Mail pricing due to bogus self-employment practices and cross-subsidisation from global revenue streams, forcing Royal Mail to accept loss-making business to retain market position.
- Letter volume decline combined with rising fuel and energy costs has eroded Royal Mail's economies of scale; the current regulatory framework provides no mechanism for consistent contribution to network maintenance costs.
- CWU proposes a network fund (rather than government subsidy or renationalisation) to stabilise costs and ensure fair competition, arguing Ofcom's current regulation ignores market realities driven by letter decline and soaring costs.
Tone
AdversarialTopics
Key actors
CWU (Communication Workers Union), Royal Mail, Ofcom, Amazon, Evri, Business and Trade Committee
Notable line
“Royal Mail does not have the commercial resilience or negotiating power against companies like Amazon, who are worth over $2 trillion globally …”
Key Quotes
“… a first-class letter posted from Lands End to John o Groats costs approximately £30 to deliver. The cost of a first-class stamp is £1.80.”
“Royal Mail does not have the commercial resilience or negotiating power against companies like Amazon, who are worth over $2 trillion globally …”
“The stark reality is that they do not have a choice. Couriers like Evri and Amazon are able to undercut Royal Mail on pricing and therefore …”
“Royal Mail is the only postal provider charged with providing a daily service to these parts of the country that are severely loss-making to deliver to, for a uniform price and service.”
“A network fund is clearly the fairer and more sustainable option, compared to a subsidy. Ofcom must accept the commercial reality and develop a fair system for network maintenance that is forward-thinking …”
Source · parliament.uk record ↗