Regulator fines Royal Mail GBP7.5 million – Royal Mail comment
Commenting on Postcomm’s announcement today that it intends to fine Royal Mail £7.5 million for failing the licence targets last year for two First Class business mail services, Royal Mail’s Chief Executive Adam Crozier said:
“This heavy £7.5 million fine further tightens the financial pressure on Royal Mail. It underlines the need for us to get on with the changes that will deliver efficiency savings and better services to customers.
“While Royal Mail has reported last month some of its best customer service for five years, we realise we have to perform even better to avoid further fines, potentially even greater than £7.5 million.
“Postcomm’s decision on the fine carries a stark message for everyone in Royal Mail as the CWU plans a 24-hour strike in London tomorrow. It is unlikely that the regulator will make any allowance for falls in customer service caused by a strike.
“Some of the London postcode areas are among the worst performing in the country. If Royal Mail is to hit its targets this current year then it’s vital that service in London improves. It is madness, therefore, for the union to inflict further financial damage through strike action.
“Tomorrow’s 24-hour strike in London could cost Royal Mail up to £10 million. As Royal Mail has said repeatedly to the CWU, a strike will not produce more money to increase the substantial amounts of London Weighting payments already on the table, which will put postmen and women in the top third of any London Weighting league table.
“There is no more money to come. Today’s fine simply means that Royal Mail will have to work even harder to generate the promised rises in pay and London Weighting.”
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Notes to editors
1. The fine Postcomm intends to impose was for Royal Mail’s failure in the 2002/ 2003 financial year to hit the targets in its licence for Response Services and PPI services.
2. Responses Services are used by businesses to provide their customers with postage-paid, return-addressed envelopes. Typical uses are by film processing firms which provide envelopes for customers to post films for developing free of charge, or by mail-order firms which provide postcards to allow customers to send for catalogues. There are around 750,000 First Class Response Services letters posted daily out of the overall average daily mailbag of 82 million letters.
3. PPI services – “postage paid impression” services – involve envelopes used by businesses and printed with a postage insignia. Typical uses include the envelopes used to send bank statements and bills. There are some six million First Class PPI letters posted daily.
