Examination of Witnesses (Questions 80-93)|
CBE, MS MARISA
TUESDAY 16 APRIL 2002
80. Coming back to it all happening too early,
last year much of the blame for Royal Mail's deficiencies was
placed on inadequate rail services. An announcement has just been
made where you said you were restructuring transportation based
on your reducing your vehicle of road fLeight and using rail more.
How will that work?
(Mr Roberts) The big difference is that the overnight
First Class mail would come off rail, because that is the most
time critical, and we would replace it by more of the bulk and
the mail which has a longer period than just the one day, so it
would be a complete switch. At the moment and traditionally, because
of its reliability in the past, we have used rail to handle a
lot of the First Class mail which has to be there the next day.
By changing that and putting it on to road overnight, which is
pretty reliable for us, and putting the slower mail on rail, we
do not have the pressure on the quality of service on that mail.
So we will be putting 18 per cent of mail on rail as opposed to
the current 14 per cent but it will be a different mix of mail.
81. Returning to the role of your shareholder
in relation to yourselves, one of the rights of a shareholder
is to sell. Were you participants in the discussions with the
Dutch Post Office about the sale of the Post Office? Can you tell
us when these occurred and why they were abandoned, aborted or
(Mr Roberts) We certainly were involved. In fact,
it was our initiative. We already have two joint ventures with
the Dutch: one is with international mail, and the other is around
a thing called the postal preference scheme which is looking at
the way in which direct mail is targeted in this country. Because
of our close relationship with the Dutch, we were talking about
ways in which we might merge some of our mail operationsand
it's merge or sell, and it did not work out. We were not able
together to come to a joint agreement of the kind of terms on
which we might put this thing together, and as a result of that
we broke off. Like so many of these talks, as you probably know,
that was the issue.
82. But there was no discussion of a plan for
a sale of equity in Consignia to the Dutch Post Office?
(Mr Roberts) We did not get a long way down the track
with these discussions because it was clear we were going to fall
out over the normal sorts of issues like control and how it was
going to be put together. The issue for us was this was not going
ahead so we did not get into any detailed discussions.
83. Staying with the role of the shareholder
at the moment, can I move to one other issue which is in relation
to the Chairmanship. Can you recall to the Committee the first
point at which Consignia sought from the Department of Trade &
Industry an indication as to whether Mr Leighton's predecessor
was going to be reappointed or not?
(Mr Roberts) I cannot because that was done by the
Chairman and the Remuneration Committee and did not involve me.
84. Can you recall for us the point at which
the Department of Trade & Industry told you, Consignia, that
Sir Neville was not going to be reappointed and, therefore, what
delay has occurred in the appointment of a Chairman since then?
(Mr Roberts) I personally knew that Neville was not
going to be reappointed I think around about the beginning of
December last year, but that does not necessarily meanI
am sorry I cannot help youthat that was the point at which
he necessarily knew. Round about that time was the point I knew
he was not going to be reappointed and at that point we then started
to talk about what would happen after that with the Department,
which led to Allan's interim appointment and following the normal
procedures, his appointment.
85. Mr Leighton, the issue of leadership in
a company like Consignia in the circumstances to which Consignia
has fallen is instrumental. Does it not seem to you, having now
taken over this responsibility in the last month, that the Department
of Trade & Industry should not have allowed the position to
emerge in the latter stages of last year and pretty much right
through the winter where Consignia did not have a chairman in
post who saw this as a long term obligation?
(Mr Leighton) That is a question you should ask them
rather than me. I think the most important thing for me is that
clearly all businesses generally prosper or not based on leadership
in those organisations. I think there is a lot of learning out
of how we have got to where we have got to, and I think the thing
that people should be encouraged by is that has been very much
drained up in the organisation. There have been no sacred cows;
everybody has been very open about the issues; and most important,
and the whole purpose of the three year renewal plan, is to say
to the organisation and everybody else that we think there is
a way forward for the organisation and that it is our intent to
become, again, the best postal service in the world. It is not
going to be without its trials and tribulations, and the business
is in very poor state, and it is going to take that amount of
time to put it right; and it did not go wrong suddenly overnight
and does not go right suddenly overnight. But the one thing I
am very galvanised by is that generally across the organisation
including the people who have a pretty difficult time as a result
of thispeople voluntarily made redundantthere is
a great will within the organisation to turn this company around
and there is a great deal of passion in the organisation, and
our task is to bring that to the fore and turn it into a positive
factor, as opposed to the negative that it has been over the last
86. Just on the point of the appointments, Mr
Roberts, you have been involved in this for some time and you
have seen people coming and going. I would imagine that the Nolan
provisions would have a part to play in this process now that
they did not have before, is that correct?
(Mr Roberts) Yes.
Chairman: Could you send us a note about that?
There has been a lot of speculation and I think that time is against
us now and I do not want to prolong proceedings on something which
is not really important, but it may be useful to get a note on
that to clarify the issue.
87. Were there any talks on equity stakeyes
or noover the future of Consignia with the Dutch Post Office,
and have there been any other discussions with other competitors
about the future, and is there a possibility that there could
be a flotation of shares within the Post Office?
(Mr Roberts) On the first question, yes, there was
a discussion but it did not get anywhere
88. On equity stake?
(Mr Roberts) Yes, there was, and it did not get anywhere
because inevitably with them as a private sector company that
was bound to come on to the table at some point. Secondly, yes,
over time there have been various discussions with various other
players about what we might or might not do, and I would expect
those to continue depending on what the circumstances are, but
nothing is going on at the moment. We are currently not having
any discussions with anybody.
89. Would it be possible for the Committee to
have a list of who you have been in discussions with in the past?
(Mr Roberts) That is quite difficult because these
are various companies, some of whom are listed, some of whom are
not, and I think one of the problems about these kind of discussions
is that if, after the event, you then start saying, "Oh,
we talked to X, Y and Z", it is quite difficult. It is price
90. So we read it in The Times as they
(Mr Roberts) I am not trying to be unhelpful but one
of the practicalities these days is that we do get all sorts of
discussions that we have had over the past few years with various
Mr Hoyle: Shall we put "serious discussions"?
Would that help?
91. Do you talk to your shareholder when such
approaches are made?
(Mr Roberts) Yes. Obviously.
92. So could we, in our commentary on today's
discussions, ask the Government if they would be prepared to issue
for us the names of those companies and organisations with whom
they were informed you were in discussion, because in not every
instance the discussions I presume get to the point where it is
worthy of mentioning to the minister?
(Mr Roberts) That is absolutely right. With some of
them there will be meetings or an odd meeting with somebody and
you say, "Well, that is not going to work" or "We
cannot do that" or sometimes it will go to a second meeting,
so if there was anything seriously happening then certainly the
shareholder would know, Chairman, yes.
(Mr Leighton) I think the only thing I would say is
that clearly there is commercial sensitivity around all those
things and, therefore, we should not be put at any disadvantage
as a result of that. Please bear that in mind. Also, at the moment
this business is very mono-focused on a stand-alone basis to deliver
the renewal plan. That is it.
93. So there is no
(Mr Leighton) There is absolutely no
Chairman: Thank you very much.