Royal Mail Raises Stamp Prices 14p
Royal Mail has been given the freedom to set its own prices for first-class stamps, and it has taken the liberty of raising prices 14p. Regulator Ofcom decided to remove the cap on what the postal service can charge for first-class stamps, but second-class stamps will continue being regulated. Now first-class stamps will cost 60p instead of 46p, while the cost of second-class stamps will also rise to 50p from 36p.
Ofcom says Royal Mail has been given the power to price its own first-class stamps to make it more commercial, as well as to safeguard the universal postal service. Royal Mail chief executive Moya Greene says she would have prevented the rise in prices if she could have. The postal service has been at risk of going under for several years, she explained, refusing to speculate about further increases in prices.
When questioned about how much was too much for stamps, Greene replied that she wouldn’t say what is or isn’t too much, as circumstances change - though she doesn’t have to charge £1 now. When comparing stamp prices to a chocolate bar, newspaper or a single bus trip, stamp prices are clearly affordable. Stamps don’t have an affordability issue, as the average household spends 50p per week on stamps, compared to £10.50 on internet and telecoms.
Ofcom’s decision to give Royal Mail the freedom to set its own prices is anticipated to lead to the postal service’s privatisation. Greene says the government could sell it by the second quarter of 2014. This also isn’t the first time that Brits have been faced with a steep rise in stamp prices. In 1940, prices rose 66%; and in 1975, first-class stamps increased 55% and second-class stamps by 58%.