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07/12/2005
Price of first class stamps to increase
The prices of stamps are set to rise next year, following an agreement between Royal Mail and industry regulator Postcomm.
The deal will see the price of first-class stamps increase by 2p to 32p next year and second-class stamps will increase from 21p to 22p.
Royal Mail had wanted to raise prices to 39p for a first-class stamp and 27p for a second-class stamp, while Postcomm had wanted prices to be capped at 36p and 25p for first and second-class stamps, respectively.
The regulator said that the increase would provide Royal Mail with an extra £1.2 billion next year, which would help it to modernise its operations and contribute towards the £4 billion deficit in its pension fund.
However, Royal Mail’s chief executive Adam Crozier said: “No-one should regard today’s proposals as anything other than tough.”
The price rises are part of proposals put forward by Postcomm to secure the financing of Royal Mail ahead of the industry opening to full competition from next month.
Royal Mail is concerned that other rival firms will be able to ‘cherry pick’ the most profitable areas of postal delivery when full competition is introduced and it will be unable to compete.
However, industry watchdog Postwatch expressed concerns that customers would now have to pay in excess of inflation for their stamps.
(KMcA/SP)
The deal will see the price of first-class stamps increase by 2p to 32p next year and second-class stamps will increase from 21p to 22p.
Royal Mail had wanted to raise prices to 39p for a first-class stamp and 27p for a second-class stamp, while Postcomm had wanted prices to be capped at 36p and 25p for first and second-class stamps, respectively.
The regulator said that the increase would provide Royal Mail with an extra £1.2 billion next year, which would help it to modernise its operations and contribute towards the £4 billion deficit in its pension fund.
However, Royal Mail’s chief executive Adam Crozier said: “No-one should regard today’s proposals as anything other than tough.”
The price rises are part of proposals put forward by Postcomm to secure the financing of Royal Mail ahead of the industry opening to full competition from next month.
Royal Mail is concerned that other rival firms will be able to ‘cherry pick’ the most profitable areas of postal delivery when full competition is introduced and it will be unable to compete.
However, industry watchdog Postwatch expressed concerns that customers would now have to pay in excess of inflation for their stamps.
(KMcA/SP)
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