UK mail watchdog furious at plan to change pricing

ROYAL Mail outraged the consumer watchdog Postwatch yesterday by proposing to charge less for franked mail than for customers who buy stamps.

Peter Carr, chairman of Postwatch, called the proposals “a bloody riot”, adding that large numbers of small businesses, as well as residential customers, would be affected by the change.

“We’re not at all happy with this,” he said. “First, we do not condone any price increases until service standards improve. And we don’t agree with metered-mail customers getting a better deal.

“We’ve had four years of continually higher prices and service standards have not improved.”

Royal Mail is proposing to charge customers with franking machines a penny less per item of first-class mail, while businesses with pre-paid envelopes will be charged the same rate.

If the new pricing scheme is agreed by Postcomm, the post regulator, it would come into force next year at the same time as an expected increase in stamp prices.

Postcomm said that, under the current price control regime, Royal Mail could either increase the price for customers using stamps to 29p from 28p and leave the price for customers using franking machines at 28p; or it could increase the price for customers using meters to 29p and for customers using stamps to 30p.

A spokesman for Royal Mail said it costs the business less when people use franking machines, which is the reason for the proposed price difference.

The spokesman said there was no reason why residential customers could not use franking machines owned by small businesses: “As long as the postage is paid, there is no reason why we wouldn’t deliver it.”

At present, about 210,000 customers own franking machines – with the smallest of these about the size of a shoe box. “They would cost around pounds 5 a month to hire,” the spokesman said.

Mr Carr, at Postwatch, said that the move would disadvantage large numbers of small businesses, as many of them still use stamps rather than franking machines.

The spokesman for the Post Office said: “We care about all our customers.”

Mr Carr said the fact that the increase in prices would be possible under the mail regulator’s price control regime was “illustrative of previous weak regulation”. He said that the industry “needs a strong regulator and we seem to have one in Nigel Stapleton”.

Postcomm is asking for feedback on the proposals by December 13, even though Royal Mail does not need regulatory permission to make these particular changes.

Royal Mail must publish the prices it intends to charge from April by the end of December this year.