UK stamp price changes from April 2006 will better reflect costs of handling mail
A basic First Class stamp will rise by 2p to 32p from 3 April 2006, Royal Mail confirmed today. The rise, which was indicated in Postcomm’s price control announcement last month, remains subject to alteration if Royal Mail does not accept the regulator’s overall price control, which is currently out for consultation. A decision on this will not be taken until the beginning of March 2006.
The price of a basic Second Class stamp will also rise by 2p to 23p, subject to the same condition.
First Class franked mail and items carrying a printed postage impression (PPI) will continue to get a 1p discount for items up to 60g compared to the price of stamped mail. For the first time, this discount will also apply to Second Class franked and PPI mail, Royal Mail announced today.
The price of some business mail services will decrease for heavy weight items. However, business mail will still continue to subsidise social mail, such as personal letters and birthday cards. Royal Mail currently loses 5p on every First Class stamped letter and 8p on every Second Class stamped letter.
Lorna Clarkson, Royal Mail’s Director of Commercial Policy and Pricing, said: “Now that the UK mail market is open to full competition, it is essential that our prices are more closely aligned to the true cost of collecting, sorting and delivering 83 million items of mail a day to 27 million addresses across the UK.
“Royal Mail’s stamp prices remain great value. First Class stamps are still cheaper than almost anywhere else in Europe – in Spain a 60g letter costs 44p to send, 80p in the Netherlands, 85p in France, 96p in Germany and £1.12 in Italy.
“The price control final proposals are tough and do not deliver the £2 billion investment that Royal Mail needs to modernise its business. Royal Mail continues to discuss with its shareholder, the Government, the need to modernise its business and talks continue with the Royal Mail Pension Trustees about how we tackle our pension fund deficit. We also need to ensure we can continue to provide the one-price-goes-anywhere universal service on which we all depend,” Ms Clarkson continued.
Royal Mail’s prices will further move towards reflecting the cost of handling mail later when Pricing in Proportion (PiP) is introduced on 21 August 2006. This new pricing system will be revenue neutral for Royal Mail and it will take into account the size and shape, as well as the weight, of mail. Around 80 per cent of stamped mail, and 70 per cent of business mail, will be unaffected by the PiP price changes.
Ends
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NOTES TO EDITORS
· There are 210,000 customers using franking machines and 28,000 PPI customers.
· Prices for franked and PPI mail – used by many smaller businesses – will be decreasing at higher weights. Some bulk mail prices for heavier items will also decrease.
· Royal Mail stamp prices easily beat the rest of Europe in terms of value-for-money.
· Full details of Royal Mail’s new prices can be found on Royal Mail’s website: www.royalmail.com, through the customer service helplines – general enquiries: 08457 740 740 or for business enquiries: 08457 950 950 – or from Post Office® branches.
