UK Royal Mail‘s Crozier denies pounds 2bn pensions rescue

ADAM Crozier, chief executive of Royal Mail, last nightscotched reports that the Government had agreed to hand over pounds 2billion to plug a pounds 4billion pension black hole.

“Absolutely not,” Mr Crozier said. “There is some confusion out there. It is not for the Government to finance the business but for the regulator Postcomm to ensure that the business can fund its activities and that is quite a difficult task.”

Royal Mail last week posted a 20.5pc rise in first-half operating profits but warned that it could be bankrupted by claims on its pension fund, which Royal Mail says has more members than any other pension scheme.

Royal Mail is in talks with Postcomm about how to modernise and fund the business. A decision from Postcomm on whether Royal Mail can increase charges on first-class mail from April is due soon. “Once the business knows where it stands, the Government can decide if it needs any more money,” Mr Crozier said.

Speaking to Jeff Randall on BBC Radio 5 Live’s Weekend Business, he said no one should “underestimate the task” at Royal Mail.

“We are 10 to 15 years behind other postal services that modernised in Europe,” he said. Mr Crozier also ruled out any suggestion that Royal Mail would start a seven-day mail service.

Mr Crozier added: “The simple fact is that we deliver six days a week and many people think that should be for five days.”

A spokesman for the Department of Trade and Industry said that no decision had yet been taken about whether to give any money to plug the pension deficit.