Price of stamps must rise, says postal chief
The chairman of postal group Consignia today announced he is seeking an urgent rise in the price of first and second class stamps.
Allan Leighton told BBC Radio 4 that he has applied for an increase of a penny – taking first class stamps to 28p and second class to 20p.
“I happen to think that 27p for a first class stamp is probably one of the best value items that anybody can purchase any day of their lives,” he said.
“And do I still believe that is the case at 28p? Yes I do and therefore that is why I think we can put the price increase through.”
Last month Consignia warned the price of a stamp could rise by up to 3p a year if plans to open the service to competition go ahead.
It called for a penny increase to fund investment for a three-year `renewal’ plan, and said further price rises might be needed if competition was introduced at the `fast track’ rate being proposed by industry regulator Postcomm.
The group claimed it is losing #1.5 million a day and that it costs 28p to deliver a first class letter.
Although the rise would generate an extra #170 million a year, Mr Leighton said it would not be enough to take Consignia into the black.
The group has already announced the cost of posting packets and parcels and of using the special delivery service will increase from July 4.
Mr Leighton refused to comment on figures quoted in reports that Consignia was heading for losses of #800 million.
However, he confirmed that the annual accounts, due to be published later this month, would show a record deficit.
“Without any doubt they will be the Post Office’s worst results ever.”
Mr Leighton was also pressed on Consignia’s record on overseas investment.
The company has spent #600 million buying into other postal companies in Europe but has been criticised for not revealing enough information on how the investments have performed.
Mr Leighton said the investment programme began before he became chairman and he was now carrying out a complete review of Consignia’s investment strategy.
“In the scheme of things, I can understand absolutely the strategy – though certainly the execution could have been better.
“For me at the moment it’s `let’s get back to our core business’ – it’s `let’s look after our people, let’s improve our service levels’.
“If we want to invest in things we want a return….and we have got to be much more conscious of the money that we spend.
“Unfortunately the PR you get is the PR you deserve and unfortunately at the moment we are not doing many things right and we are getting a right caning for it.”
The interview for File on 4 will be broadcast tomorrow on BBC Radio 4 at 8pm.
