Crozier: Time to deliver

On Sunday 25 October Andrew Marr interviewed Royal Mail Chief Executive Adam Crozier.

Please note 'The Andrew Marr Show' must be credited if any part of this transcript is used.

ANDREW MARR:

Now then, the latest twist in the Royal Mail dispute is that, thanks to the General Secretary of the TUC, both sides are going to be talking face to face tomorrow - perhaps staving off the strikes plan for later this week. Well the man in charge of the Royal Mail will have a crucial say in what happens. He's called Adam Crozier and he's with me now. Welcome.

ADAM CROZIER:

Morning.

ANDREW MARR:

Now tomorrow's talks. The Royal Mail had said that you wouldn't go to ACAS face to face until the threat of the strike was lifted. Now the threat of the strike hasn't been lifted and yet you're talking face to face under the auspices of the TUC. Why?

ADAM CROZIER:

Well, first of all, I've had a number of conversations with Brendan Barber over the last few days about getting involved - partly because the TUC were involved in setting up the 2007 modernisation deal, and I think that's a better place to start because it means they're up to speed with the issues that we face. And clearly the objective for us is to get back to the agreement we pretty much had on Tuesday night, so that hopefully the strike can be called off and we can then get into proper talks, which in fact will then take a couple of months really to do properly so that we can move onto the next stage.

ANDREW MARR:

I know the union says that you weren't as close to agreement last time as you say you were. But putting that to one side, a lot of people watching simply don't understand what this dispute is about, so can you enlighten them?

ADAM CROZIER:

Yeah, I can understand that. And certainly even from the emails from lots of our people all over the country, I think there's a lot of confusion about what it's about. It really goes back to the agreement struck in 2007, which was all about asking our people to work all the hours they are paid to work, to do that in a flexible way, and to use the new machinery that we're bringing in. And we've been bringing in those changes all across the country, and then earlier in sort of March/April we started to bring those into place in London. And clearly a number of people in London did not want to pursue those changes and that's created a bit of a dispute, and that's one half of the problem. And then the second half of the problem is that in the 2007 agreement, there was a clear next phase of discussions that have to take place about the next phase of our modernisation. There we don't have a dispute because we're just beginning those talks. So it's two parts of it really, and it's all about making sure that people really do … When we create a national agreement, you know we do want and expect it to be seen through in every area of the country.

ANDREW MARR:

63,000 jobs more or less have gone already. When you talk about modernisation and bringing in new machines, that must mean more jobs going too? There's no point in investing in machines if you're not going to make job reductions. So how many more jobs over the next few years are going to go?

ADAM CROZIER:

I don't think actually in fairness to all parties, including the union, that the number of job losses is actually the issue at heart. I think everyone accepts that modernisation and improving …

ANDREW MARR:

(over) But in round figures, how many?

ADAM CROZIER:

… and improving efficiency means that job losses will go.

ANDREW MARR:

But in round figures, how many more do you think will go?

ADAM CROZIER:

The first people to hear about that will be our people naturally, and I'm sure you would expect me to say that. But the second thing is it also depends on what's happening in our marketplace. Every single postal operator across the world is fully expecting that in three or four years time, they will be handling 30 to 40% less mail than they do today. And the reason you can't ever put a finite number on how many jobs is simply because our market in the letter side is shrinking all the time, whilst at the same time we're growing our business …

ANDREW MARR:

(over) In parcels.

ADAM CROZIER:

… massively in terms of packets and parcels.

ANDREW MARR:

Yes, sure.

ADAM CROZIER:

But what the union do have to accept is in that growing area that is totally competitive marketplace, so all of our customers there will deal with three or four people who will be delivering their parcels. And, therefore, we've got to make sure we keep delivering the mail, and strikes do not help us grow that area of the business.

ANDREW MARR:

Sure, I can understand that. But tomorrow morning's talks, will you be there?

ADAM CROZIER:

I won't be there. Neither will Billy Hayes. It's been led by Dave Ward on the union side, who is the General Secretary for Postal …

ANDREW MARR:

And Mr Higson …

ADAM CROZIER:

… and Mr Higson, who is the Managing Director of the Royal Mail Letters Business.

ANDREW MARR:

At what point do you become involved? Because you're the man at the top. In a sense, it is your job, isn't it?

ADAM CROZIER:

Absolutely, and obviously I have been very involved. But my number one priority at times like this, not surprisingly, is our customers. And I have spent the last week talking to customers - social customers, small and medium size businesses, large businesses - and what those customers want is they want a fully modernised Royal Mail, so they want us to see it through; and, secondly, they want to be reassured that we are doing everything in our power to a) get their mail delivered and b) do our best to solve the problems that we're having with the union at the moment.

ANDREW MARR:

Are you surprised by the fact that the public seem to be on the side of the union, not on your side?

ADAM CROZIER:

I'm not aware that that is the case.

ANDREW MARR:

That's what the polling shows.

ADAM CROZIER:

No, that's what one poll from 'Newsnight' shows with a very particular question. Everywhere I go, the comment in every newspaper, all round the streets is that people do not want a postal strike in the run up to Christmas.

ANDREW MARR:

Nobody wants a postal strike, but a lot of people think that posties are badly paid and have a very, very hard job; and that particularly with the part privatisation so far, they are delivering very, very large quantities of parcels, as you've said yourself, and there's a lot of weight in that, and that they have a case actually.

ADAM CROZIER:

Well I think you've got to remember 80,000 of our people did not vote for a strike. 80,000 people did not vote for a strike.

ANDREW MARR:

But a majority did.

ADAM CROZIER:

80,000 people did not vote for a strike right across the country.

ANDREW MARR:

(over) I know, but how many people did vote for a strike though?

ADAM CROZIER:

I think it was about 60,000.

ANDREW MARR:

Of …? Yes but of those who voted, a substantial majority voted for a strike. This was a completely legal strike, gone through all the …

ADAM CROZIER:

(over) Abs… I'm not, I'm not …

ANDREW MARR:

… 76% I think voted for a strike.

ADAM CROZIER:

… I'm not questioning that at all. I'm just reminding you that 80...

ANDREW MARR:

(over) Yeah, yeah, 76%.

ADAM CROZIER:

… and in many ways, that shows up across the country. Whilst the strike was very solidly supported in London, there are regions of the country …

ANDREW MARR:

Yeah.

ADAM CROZIER:

… where between 40 and 60% of people turned up for work perfectly as normal.

ANDREW MARR:

Okay. You've had more industrial disputes in your company than any comparable organisation, and I think certainly in one year you had more days lost than anybody else by a mile. Why is that? Is it because it's badly run, or because you've got a particularly stroppy union?

ADAM CROZIER:

I think it's a whole mix of things. In many ways, you have to …

ANDREW MARR:

(over) It's got to be one of the two, hasn't it?

ADAM CROZIER:

You have to look at the context of it. If you go back just very, very briefly to six years ago, I think what people tend to forget is the Royal Mail was on the verge of going into administration. It had lost £1.7 billion across a two year period; it had the worst strike record of any company in Britain, as you say; it hadn't hit a quality of service target for ten years and was operationally losing a million pounds a day. Since then, we are now making a million pounds a day. Up to the strike, we had our best quality of service in our history. We have the lowest stamp prices of pretty much anywhere in Europe. We have amongst the highest quality of anywhere in Europe. And along the way, we've parted company with around 63,000 people.

ANDREW MARR:

(over) Yes, a lot of people …

ADAM CROZIER:

A huge change.

ANDREW MARR:

… a huge number of people.

ADAM CROZIER:

And clearly we still need to … Because of where we started from …

ANDREW MARR:

(over) If I was a hardworking postie …

ADAM CROZIER:

… we need to go through a lot more change to be able to modernise and deal with what's happening in our marketplace.

ANDREW MARR:

But if I was slogging round the street on pretty close to the minimum wage … You're on … your remuneration I think is about £3 million last year. I don't know if that makes you feel uneasy, given the number of people on the minimum wage that you're unemploying?

ADAM CROZIER:

Yeah … No, my remuneration wasn't £3 million last year, as it happens, but that's by the by.

ANDREW MARR:

The year before.

ADAM CROZIER:

This dispute, as the union have said many times, is not about pay. So that is not the issue here. And what we do have to accept …

ANDREW MARR:

(over) But they're not well paid and they're looking … Sorry to interrupt, but they're not well paid and they're looking at a future which is bound to result in lots and lots and lots of job losses. You can understand why these people are nervous and worried. And when you know the union says to them we have to make a stand at some point, isn't it the case that if the union doesn't make a stand, it is going to be a future of fewer and fewer jobs for its members?

ADAM CROZIER:

Well to be absolutely fair to the union for a second, the union is not making a stand about job losses. Everyone accepts there will be job losses. And of the 63,000 people that we've parted company with, one person has been made compulsory redundant. It's all been on a voluntary basis. So that's not really the issue. And the simple fact is there will be fewer jobs as we become more efficient, and there will be fewer jobs because of the huge volume of losses in mail …

ANDREW MARR:

(over) If the … If the Conservative …

ADAM CROZIER:

… and we have to reflect that.

ANDREW MARR:

If the Conservatives win the election, they've already said that they're going to privatise the Post Office. To what extent is this a holding operation ahead of privatisation and would you, if asked, run a privatised Post Office?

ADAM CROZIER:

Well I think, first of all, it's worth saying that you know this is about creating a modern, efficient Royal Mail. In the recent Postal Services Bill, basically what that set up was that the company needed three things: it needed a change in the way we were regulated; it needed a solution to the huge pension deficit problem that we have of around £10 billion, which is enormous by anyone's standards.

ANDREW MARR:

Yes.

ADAM CROZIER:

And, thirdly, that we needed an injection of capital to allow us to a) modernise quicker and b) create new revenue streams to help protect jobs and create a future for the Royal Mail. Now that package is no longer on the table for now, and the Royal Mail has to get on with fixing its own problems. And it's worth nailing at that point that the idea that's been reported by some papers that in some way Lord Mandelson or frankly anyone else in government has been involved in our dispute over the last couple of weeks is a nonsense because …

ANDREW MARR:

Have you not been talking to him?

ADAM CROZIER:

Of course I've been keeping them up to date, but they do not …

ANDREW MARR:

(over) And has he not been saying to you it's suicidal?

ADAM CROZIER:

(over) I think you'll find … He has, but I think you'll find he's also said very, very clearly right from the start that the government would not interfere.

ANDREW MARR:

But you're surely talking to him on a daily basis, aren't you?

ADAM CROZIER:

Not on a daily basis, no, but we are keeping them informed of the situation as you would any shareholder.

ANDREW MARR:

(over) So there's no sense that … He's not as it were pulling the strings?

ADAM CROZIER:

None whatsoever, complete nonsense.

ANDREW MARR:

Alright. And just about the question I asked you before.

ADAM CROZIER:

Sorry, go ahead.

ANDREW MARR:

Privatisation. The Conservatives come in, let's say, and there's privatisation. Would you still hope to head the Royal Mail under those circumstances?

ADAM CROZIER:

I think the best way to answer that is the decision about who owns the Royal Mail is entirely a decision for the … It's not a decision for us. Our job is to run the Royal Mail and face up to the problems we have irres… irrespective …

ANDREW MARR:

(over) A very good way would be yes or no actually, with respect.

ADAM CROZIER:

(over) Well it's not our issue. Our issue is we have to run the Royal Mail and the shareholder will decide whether they want to own it or not. That's nothing to do with us.

ANDREW MARR:

Okay, there's a strike scheduled for Thursday.

ADAM CROZIER:

Yes, there is.

ANDREW MARR:

Is it going to go ahead, do you think?

ADAM CROZIER:

I very much hope not. I hope that people will see sense.

ANDREW MARR:

Can you give the union enough tomorrow to stop it?

ADAM CROZIER:

It's not a question of giving the union things. I mean you know our very clear message is there is nobody who believes that there is any going back on modernisation. In fact everyone believes if anything it needs to speed up.

ANDREW MARR:

(over) So there's nothing different that you can say tomorrow?

ADAM CROZIER:

No, I'm not saying that. What I'm saying is that we need to try to get back to where we were on Tuesday night. What that agreement did was set up the things that we need to talk about next to do the next phase, and I hope commonsense will prevail. And I think one of the ways for commonsense to prevail is for people to stop some … recognising we're in a goldfish to stop some of the nonsensical things that are being said - exaggerated claims about backlogs that people use in the industry, exaggerated claims about trying to get government involved. A lot of nonsense said about this subject, load of nonsense written about this subject. I think people would be better placed to, in the nicest possible way, shut up, get on with these tasks, and get back to an agreement …

ANDREW MARR:

(over) And keep our fingers …

ADAM CROZIER:

… and let's hope that commonsense prevails.

ANDREW MARR:

Alright. Thank you very much indeed, Adam Crozier.

INTERVIEW ENDS

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