Examination of Witnesses (Questions 300
MONDAY 25 MARCH 2002
ROBERTS CBE, MARISA
300. So that is 15,000 on top?
(Mr Roberts) Yes.
301. Of which 10,000 came from the EU Directive
and a further 5,000 job losses would come from
(Mr Roberts) I think he was just splitting £500
million and £250 million.
302. On the same calculating method, you would
(Mr Roberts) Of course. Can I emphasise to the Committee
303. That is 40,000 jobs. With the EU Directive,
which is almost certainly going to come in, that is 40,000 job
losses, is it not?
(Mr Roberts) It is exactly that but that is not what
we have been saying.
304. I will say it again now.
(Mr Roberts) I think you are playing with numbers
and words, if I may say so. We have done a calculation, as it
were, around this table. I would not want to be pinned to that
calculation at this stage because, as we have said, we are not
yet clear exactly how the impact will fall on us when these changes
to liberalisation come in. That is based on our assumptions. It
is not necessarily true that it would have to be taken all out
of costs but the assumptions that I have been asked to work to
were assume it is taken out of cost, it will have an impact on
staff. If it did just what you have described, yes, it would add
up to 40,000 but that is not what we are saying today. We are
adding apples and pears together to come up with a result.
305. As you might expect postal workers tend
to follow what Consignia says.
(Mr Roberts) I know, that is why I am rather concerned
that we are doing a calculation around the table.
306. I bet you are. When Postcomm appeared before
us Mr Stanley, who is the Chief Executive of Postcomm, said to
us that ". . .the management and workforce will only
change if they face a real danger that they will lose business
to competitors. It is too easy if a company has a monopoly and
it is owned by the taxpayer and has recourse to the taxpayer to
stay as it is". Do you agree with that?
(Mr Roberts) I think there is an element of truth
in that. I do not think I would agree that you would never change.
I think we have been trying over a number of years to make changes
and I think some of them have been very successful. I think there
is no doubt that when you have competition, as I was saying earlier,
that does provide an added spur. If you have always been in a
monopoly, the prospect of competition is something which, as we
have seen in the last 12 months, really gets the whole of the
industry focusing, not so much internally, which monopolies do,
but focusing much more externally on what is going to happen in
the market, what is going to happen to your customers, what is
going to happen to your revenue.
307. You would agree with him also when he said
whenever you speak to senior managers, middle managers or the
workforce of Consignia they say this company will never change
until we see competitors walking down the same streets delivering
mail against us. It is a fairly constant theme for them.
(Mr Roberts) I think there is no doubt that if you
apply that to the letters business, because of course we have
exactly that situation in parcels already, that would administer
probably the biggest shock to the organisation that it has ever
had. I do not think I accept though that is the only way in which
you get change.
308. Maybe I am coming at this from a different
angle from some Members of the Committee. My fear is that you
are not going to be exposed to enough competition, that is my
concern. You are raising all sorts of fears about what might happen
if you are exposed to competition. All the evidence from various
European countries that have gone for greater liberalisation is
that the original provider retains an absolutely dominant market
position. Do you accept that is the case?
(Mr Roberts) I think there are few examples. I think
the most quoted examples are Sweden, New Zealand and Finland,
very small countries in the main in postal terms, where liberalisation
has been introduced in different ways. For example, in New Zealand
there is no regulator and as a result the industry has been able
to see off competition, I think, quite easily. In Sweden, we know
that the Swedish postal administration got itself into trouble
for predatory pricing early on. In Finland, because there is no
access pricing, because of the high tax compensation payment for
any competitor, I think there are no competitors. I think that
some of the examples that are quoted from abroad are not necessarily
good examples for countries like ourselves, Holland and Germany.
There is no doubt that at the end of it, your statement is absolutely
correct, in those situations the incumbent has tended to hold
on to an enormous part of the market.
309. That is because you have the infrastructure,
you have got the brand name.
(Mr Roberts) Sure.
310. By the way, what was the cost of changing
the name to Consignia?
(Mr Roberts) It was half a million pounds for getting
the name and it was £1.5 million for making the various physical
changes to become a `Plc' which was a price we would have had
to have paid anyway given that we were changing from being a state
industry to being a `Plc'. The basic stuff like the name plates
and everything else outside buildings, notepaper, getting a company
number and name off.
311. How much is it going to cost to change
(Mr Roberts) It will doubtless cost another half a
million pounds if it were to be changed back.
312. A complete waste of money.
(Mr Roberts) Indeed, if you change it back.
313. You are going to change it back, are you?
(Mr Roberts) I do not think any formal decision has
yet been taken on that.
314. There is an awful lot of current press
speculation that you are going to change your name back. You are
saying you are not going to?
(Mr Roberts) We have not taken any decision on that
at all at the moment.
315. You have not taken the decision?
(Mr Roberts) No.
316. So you do not know where the speculation
is coming from?
(Mr Roberts) I have seen all the speculation in the
press and I think our Chairman has been very clear in saying that
he is not very keen on the name, but he has also made it clear
that that is not the issue of the day, not on a day when you are
talking about 13,000 redundancies.
317. Are you keen on the name?
(Mr Roberts) I rather like the name, yes. I actually
believe that it was introduced for the right reason, which was
to try to give a bit more space to the three key brands of Royal
Mail, Parcelforce Worldwide and the Post Office, meaning the high
318. So the Chief Executive and the Chairman
of this company cannot even agree on the name.
(Mr Roberts) I do not think I actually said that.
That is not the issue for today and I think you trivialise it
if you talk about that on a day when we have had to do some rather
more fundamental changes than the name.
319. Actually, with respect, quite often, and
I am thinking of British Airways here, it is a symbol of companies
getting themselves into a mess when they start messing around
with the name without addressing the more fundamental problems
of the business.
(Mr Roberts) I think we were doing both. I think we
were addressing both the fundamental problems and we were changing
the name. One of the fundamental problems was the confusion between
the Post Office, meaning the group, and the Post Office, meaning
the shop on the high street.