UK Royal Mail is turning corner, says Crozier

The chief executive of the Royal Mail apologised to British businesses for the poor service it has provided but stressed it had now turned the corner.

Adam Crozier told the CBI Annual Conference in Birmingham that stamp prices were likely to rise in the future so Royal Mail could compete with other European operators entering the market.

But despite making progress, Mr Crozier denied claims that the service was being primed for privatisation.

He said: ‘My aim is to run a more efficient Royal Mail. The future ownership of the Royal Mail is a matter for the shareholder – the Government.

‘My understanding is that is not on the agenda at the moment.’

He said great progress had made during the Royal Mail’s renewal plan, but much work needed to be done.

He said: ‘In 2002 when we were Consignia, we were losing pounds 1 million a day, and had a negative cash flow and the situation was getting worse.

‘We were two months from not being a going concern. We were running at 78 per cent next day delivery, while 28 million items were lost every year.

‘People were demoralised, pay was too low and people were working six days a week. We had the worst strike record of any company in the country while bullying and harassment was then quite common.

‘Now we have turned around a debt of pounds 400 million, and have a positive cash flow.’

Mr Crozier said there had been major changes in the way Royal Mail transported, sorted and delivered letters.

He said: ‘The 190,000 people who work for us have had their job changed completely.

‘A total of 37,000 people have left the business, and we have reduced the number of post offices. We have focused on improving our quality of service.

‘Our first class target is 92 per cent, and we have achieved 98.6 per cent, which is well above the target.

‘Our business products are performing well while the amount of lost mail has been halved.’

But despite the progress Mr Crozier admitted there was still much work to be done.

‘We are getting back to where we should be, but we are aware that we have hit business pretty hard and the public as well, and we apologise for that.

‘We recognise that when we fail it makes life very difficult for everyone.

‘It is not just big business, but small and medium business as well.

‘I would like to thank everyone for their patience.’

Mr Crozier said the price of stamps would have to increase to match those of European competitors entering the market.

He said: ‘We have the lowest stamp prices in Europe. A first class stamp in Britain is 28p, the equivalent in Germany is 61p.

‘Our profit margin last year was two and a half per cent, compared with 20 per cent by our Dutch and German counterparts.

‘But we have the highest targets. The target for next day delivery in Germany is 80 per cent, for us it is 921/1 per cent.

‘We also work in the most demanding environment. In Germany they have until 5pm to deliver the post, in the UK we have until lunchtime.

‘We have death by targets, we have the most of anyone. We have 29, compared with two in Germany and one in the Netherlands.’

‘But we have a fantastic band, the most committed people and an extraordinary amount of goodwill from customers big and and small who are willing us to succeed.’