Post Office group set for rift on 1p mail rise

Post Office group set for rift on 1p mail rise
From THE TIMES, April 12th, 2001

Christine Buckley, Economics Editor CONSIGNIA, the holding group which runs the Post Office, yesterday
squared up for an early dispute with its regulator when it filed a request to
put up charges on first and second-class mail by 1p. The application, which also seeks permission to impose increases
across business services, was attacked by the postal consumers’ group. Peter
Carr, chairman of Postwatch, said: “Service levels to customers are at their
lowest for years. Customers cannot be expected to continue to pay more and
more for a deteriorating service.” Consignia last put up mail charges last year, when it raised the
price of a first class stamp by one penny to 27p. The company said yesterday
that it needed extra revenue, of about Pounds 280 million over 18 months, to
invest in the underlying business. A spokeswoman said the money was needed to
improve deliveries. Standards have dropped and the Post Office will now face
fines if it continues to miss goals. Richard Sykes, managing director for mail services, said: “We have
kept prices stable for a long time while key areas of business expenditure,
such as fuel, have risen significantly. In addition, we have to provide
competitive rates of pay.” Consignia wants to increase prices by October but sources at
Postcomm, the new regulatory body which came into force last month, said it
would need much longer than that to look at the proposals. The regulator,
which is keen to promote competition, will be reluctant to sanction a price
rise. Commentary, page 31 (c) Times Newspapers Ltd, 2001THE TIMES, 12th April 2001