Royal Mail has seen its revenues increase by 1 per cent in the three months up to the end of 25 June 2017, despite its ongoing pensions dispute with staff and unions.

Its chief executive officer Moya Greene said it was a “good start” to the financial year, with the 1 per cent revenue increase driven by a strong performance in general logistics systems (GLS), which offset a 1 per cent decline in UK parcels, international and letters (UKPIL) revenue.

"We remain on track to deliver our cost avoidance and net cash investment targets for the full year,” she said.

In spite of the positive results, the trading update also reported on the closure of the Royal Mail Pension Plan, which will close to future accrual on 31 March 2018. It noted that it has had extensive talks with its unions (Unite/CMA and the CWU) on proposals for future retirement benefits for plan members.

“We were pleased to announce on 14 July that we have improved our proposal and are now offering plan members a choice between a DB cash balance scheme and a DC scheme. Both schemes will be established as new sections of the plan. We are also proposing improvements to the Royal Mail DC plan for current and future members. We expect that the overall cost of the new proposal will be no more than the current cash cost of annual pension contributions of around £400m,” it said.

Royal Mail said it believes that then risk to the company of the proposed DB cash balance scheme would be materially lower than under the current plan. “Our managerial union Unite/CMA believes that this is the best position achievable and is positive in keeping the DB scheme open, and is planning to hold a consultative ballot of its members on the proposal. We continue to discuss future pension arrangements with the CWU,” it said.

Commenting, CWU deputy general secretary postal Terry Pullinger said: "The CWU rejects the latest proposal from Royal Mail. It does not meet our aspiration of a wage in retirement pension scheme, but rather still promotes the conventional wisdom of a cash-out arrangement at the point of retirement. Whilst using elements of the CWU’s proposed Wage in Retirement Scheme, it would still represent a significant shortfall in the pensions promise and it is not something that we are prepared to recommend to our members.”

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