Tag: Royal Mail

Royal Mail is “optimistic” it will win government approval for its plan to give a fifth of its shares to staff, while insisting this is not a back-door route to full privatisation. Allan Leighton, chairman of Royal Mail, told MPs yesterday it would be “very straightforward” to set up a share ownership scheme for employees of the state-owned postal services operator. “We think it should start with 20 per cent,” he told the trade and industry select committee. Shares, distributed equally to employees, could be traded via a trust, he said. “It’s very easy to do, not at all complicated (and) our people would understand it.” Speaking after the hearing into Royal Mail’s future, Mr Leighton said the government had discussed but not yet agreed the employee share proposal. The scheme, which would require parliamentary approval, is likely to run into strong opposition from unions and Labour backbenchers.

The Royal Mail is using obsolete equipment to sort letters and needs to spend GBP2 billion to remain commercially viable when the postal market is opened to competition in the New Year, its chief executive warned today. Adam Crozier told MPs that rival firms, including TNT and German-owned Deutsche Post, had modernised their businesses 15-20 years ago. There had been “chronic” under-investment in Royal Mail’s network, so that it only sorted 50% of its letters mechanically, compared with 90% for competitors, the Trade and Industry Select Committee was told. The Royal Mail said in a report to the MPs: “Much of the network depends on obsolete equipment and the business has significant distance to close to achieve best practices and processes. “Royal Mail requires significant investment and substantial operational change if it is to remain not only competitive but also commercially viable in a fully liberalised marketplace.”

Royal Mail tonight launches its first advertising campaign in 18 months in a bid to boost its brand credentials before the market is opened up to competition next year. The company, which handles 83 million items a day for 27 million UK addresses, hopes the campaign will boost its brand credentials and link Royal Mail to the “magic of mail” as the company’s monopoly on home delivery is broken in January. “Royal Mail has been preparing itself for the introduction of full competition for some time. Naturally we want to cement our position as market leader by having advertising that communicates the impressive service we offer the UK each and every day,” said Tom Hings, the head of brand and advertising at Royal Mail.