Statement – Royal Mail underlines continued commitment to mail security and quality of service to customers

Royal Mail values every letter and takes the security of the mail extremely seriously. The company is currently providing the best quality of service in its history, and the vast bulk of mail arrives safely and on time.

Postcomm’s report concentrates on events that occurred up to two years ago when Royal Mail was going through massive operational change: Royal Mail has been working – and is working constantly – with Postcomm and independent advisors to continuously improve the security of the mail. While we are always looking to improve further we believe that our mails pipeline is one of the safest and most secure in the world.

Postcomm is not making an enforcement order against Royal Mail, which the regulator acknowledges “has substantially improved” its performance in protecting the safety and security of the mail.

According to independent security experts, Control Risks Group, which carried out a review of Royal Mail’s security and reported in November 2005: “Royal Mail’s security systems are robust, supported by appropriate management structures and controls and are considered to be best practice.

“There is visible commitment by management to continuous improvement, evidenced by mail protection improvement processes, action groups and security actions based on audits and crime intelligence.”

The facts are as follows:

· The amount of lost mail has halved over the last three years and Postcomm doesn’t dispute Royal Mail’s estimate that 99.93% of the 22 billion letters sent in the UK arrive safely – and that only a tiny fraction of those that don’t are stolen.
· Last year the total amount of mail stolen was around 0.006% of an annual mailbag of 22 billion items.
· Around 80% of the total stolen mail is taken by criminals targeting Royal Mail vans, stealing bags of mail and attacking our postmen and women.
· Royal Mail estimates that around 200,000 items (0.001% of the 22 billion handled annually) are stolen by Royal Mail people.
· Royal Mail has reduced the number of casual postmen used in the operation from more than 25,000 in 2003 to fewer than 1,000 today.
· Royal Mail maintains a substantial internal security team which is effective in targeting the small number of employees involved in criminal activity. Last year Royal Mail caught and prosecuted 394 employees out of a total workforce of around 200,000.
· Royal Mail now vets all new employees, which no other postal operator routinely does.

The vetting of employees for criminal records is one of the most important things we have done to improve security. But we are now concerned that cases being brought against police authorities under the Data Protection Act will threaten our ability to carry out these checks and have asked Charles Clarke, the Home Secretary, to ensure we will be allowed to continue vetting in future.

Royal Mail has already paid many millions of pounds to both social and business customers in compensation for a dip in the quality of service at the time Postcomm has been investigating. We believe that the scale of the fine, announced today, is unfair, has no basis in logic, and does not follow Postcomm’s own regulatory guidelines. The fine simply diverts money that could otherwise have been invested in customer service to Treasury coffers, with no benefit whatsoever for customers.

The fine far exceeds those levied by other sectoral regulators for similar licence breaches (ranging between £25,000 and £1m and generally to the lower end of that scale). The fine is also above almost all of those imposed by the OFT for hard-core competition offences such as price fixing (typically thousands of pounds to low millions). We believe it is completely inconsistent for Postcomm to impose a fine of £11.38million and, at the same time, indicate that there is no necessity for an enforcement order.

Royal Mail will do everything in its power to appeal the unreasonable size of the fine. Every letter remains extremely important to us and we will continue to strive to ensure that our mail service remains among the safest and most secure in the world.

As Postcomm rightly says, there is no doubt over the dedication and skill of the vast majority of our people. Everyone at Royal Mail will continue to work together to maintain our record quality of service and the security of the mail.

Ends