Anger at plan to put a penny on stamps

Anger at plan to put a penny on stamps
From The Daily Mail April 12th, 2001

BY DAVID WILKES THE Post Office wants to increase the price of stamps by a penny from
October, it emerged yesterday. If the rises are approved, first class would go up to 28p and second class
to 20p. The Post Office, now a public company and renamed Consignia, is facing a
threat to its monopoly after the way was cleared for other firms to deliver
letters. The move to raise prices comes in the wake of a Daily Mail investigation
which revealed that more than 14million letters a day arrive late – or not at
all. Consignia’s efficiency has been blighted by a string of local wildcat
strikes. First-class stamps rose only last year, up by a penny. Second- class stamps
last increased in July 1996, when they went up by a penny to 20p. They went
back to 19p in 1999. Consignia needs permission from the new industry regulator, Post-comm,
before it can increase prices. But the consumer watchdog body Postwatch, formerly the Post Office Users’
National Council, says the increases would cost customers an extra
£280million in the first 18 months. Postwatch, which must be consulted before
a decision is made, is already angry that Consignia was allowed to raise
prices for a range of business and parcel services two weeks ago. Chairman Peter Carr said: ‘Service levels are at their lowest for years. Customers cannot be expected to continue to pay more and more for a
deteriorating service. ‘First-class services were increased last summer and then services collapsed. ‘The Post Office has just secured the regulator’s blessing for price
increases for a third of its revenues. It now wants to empty the trough with increases for the remaining
two-thirds. ‘Postwatch intends to subject the application to a very thorough
investigation. Only if the Post Office can prove that the increases are
essential will we endorse them.’ For its application to succeed, Consignia
must demonstrate that, without the rises, there is a significant risk to its
ability to finance its licensed activities. It must also show that no other course, like improving efficiency, is
appropriate. Consignia said last night that in the mid-1990s the Post Office
had been paying most of its profits – more than £1m every working day – to
the Treasury and was not able to invest at the level it wanted to. It said: ‘There is now £600mil-lion to £800million under-investment. We need
to raise prices to address that, so we can improve service.’ In the Daily
Mail test, 2,000 letters were posted from 50 different boxes to 40 locations
throughout the UK. Of the first- class mail, only 69 per cent arrived the
next day, dismally short of Consignia’s target of 92.5 per cent. Projected
nationally, that would mean 6.5million delayed letters a day. Second- class mail also did badly, indicating that 7.6mil-lion letters a day
arrive late. A recent report by Postwatch suggested that a million letters a
week never arrive at all. d.wilkes@dailymail.co.uk Years of price rises YEAR 1ST CLASS 2ND October 1989 ………20p…………15p September 1990 ….22p…………17p September 1991…..
24p…………18p November 1993 …..25p…………19p July 1996 …………….26p…………20p April 1999 ……………26p…………19p April 2000…… ………27p…………19p October 2001?……..28p.
………..20pDAILY MAIL, 12th April 2001