Consignia bosses turn down pay rise

Consignia executives at the centre of a "fat cat" pay row today caved in to pressure and turned down a 10 per cent pay rise.

The planned increases for chief executive John Roberts, who currently earns £205,000, and head of mail services Jerry Cope, who is on £140,000, had been immediately attacked as irresponsible, particularly when the company is incurring massive losses.

Peter Carr, chairman of industry watchdog Postwatch, had earlier voiced his astonishment. He said: "It is extremely difficult to justify such pay increases when the service is so poor and they are losing £1.5 million a day."

Nigel Waterstone, the Tory spokesman on postal services, said: "It is bizarre to reward failure like this. It is insensitive and provocative for the Post Office workers while their pay negotiations are going on, and also for the public who rely on the services."

In a short statement today, Mr Roberts announced that the two men had decided not to take the pay increases "at this time".

Mr Roberts said: "The debate about levels of pay within Consignia is legitimate, but our priority is the pay of postmen and women.

"The business is in a perilous state and the key issue for all of us is affordability. We will address all these issues when the company can afford it and not before.

"Jerry Cope and myself have therefore decided not to take pay increases at this time."

The timing of the awards - which would have seen Roberts's salary rise by more than £20,000 and Cope's by £14,000 - could not come at a worse time for the troubled organisation.

It is locked in pay talks with unions trying to raise the average weekly wage from £250 to £300 by 2004. They are immediately seeking a five per cent pay rise.

Consignia, which as well as facing huge losses is poised to cull 30,000 jobs, offered a national wage rise of 2.8 per cent, but that was rejected by workers, who want their pay brought up to £15,600 for a six-day week.

The Communication Workers Union's deputy general secretary, John Keggie, who has been leading the negotiations, said: "This is clearly double standards and will raise the temperature in the pay talks."

The bosses' intended increases, which had been approved by the Department of Trade and Industry, also baffled Martin O'Neill, the Labour chairman of the Trade and Industry Select Committee.

He said: "It would appear that the normal rules of payment by results are being rewritten. However, it must take a fair degree of ingenuity to run a monopoly at a loss. Perhaps that is being rewarded."

Mr Roberts and Mr Cope were granted the rise as they were believed to be unhappy that they were earning less than other board members.

Last week the post company was forced to admit that it had failed to reach any of its service targets for the nine months from April to December of last year.

The organisation may face a heavy fine if it fails to improve service dramatically during the first three months of this year.

Next month the regulator is also poised to deliver the final proposals for introducing competition into the post market.