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Small Businesses will have to pay pounds 1.5 billion more each year on postage due to Royal Mail’s price restructuring, a survey suggests.
The prediction came as Postwatch, the consumer watchdog, gave a warning that post offices were ill-prepared for tomorrow’s introduction of Pricing in Proportion (PiP), with a third of them having inadequate information to explain the changes to customers.
Research by the Forum of Private Business (FPB), a lobbying organisation, found that a quarter of Britain’s four million small companies believe PiP will saddle them with an increase in postage costs of 15 per cent or more.
According to Postcomm, the postal service regulator, a small business with fewer than 50 staff pays, on average, up to pounds 10,000 a year. If these companies continue to use the service at current volumes – more than 19 billion letters and parcels a year – the one million companies that will be affected by the changes will see an average increase in their costs of pounds 1,500 each, or pounds 1.5 billion overall.

A third of post offices are not ready for the introduction of postal charges based on size rather than weight, a Government watchdog has warned.
Postwatch predicted long queues at post offices on Monday as the new regulations come into effect.
The Royal Mail said postage for more than 80% of items, including business post, will stay the same or be cheaper.
The change was being introduced so prices reflected more fairly the actual cost of collecting, sorting and delivering mail, it said.
A survey conducted by Postwatch found that 37% of offices had not put up a poster explaining the changes, known as Pricing in Proportion (PiP).
Leaflets explaining the new system were not available at 32% of 307 offices visited and 34% did not have a measuring template displayed so that customers could check the size of their post.
Under PiP, the price of an average first class letter will be 32p but if its length exceeds 240mm, its width 165mm or its thickness 5mm, it will be classed as a large letter. This will cost 44p to post if it weighs less than 100 grammes.
Anything more than 353mm long or 250mm wide or 25mm thick will be considered to be a packet and will cost between GBP 1 and GBP 4.74, depending on its weight.

UK postal service Royal Mail said it broke a record for delivering first class mail in the first quarter of 2006/7.

The state-owned group said 94.1 pct of first class letters posted between the end of March and early June arrived at their destination the next working day, well above its 93 pct national target.

Second class mail also beat its 98.5 pct target, with a 99.1 pct performance over the same three-month period — its best first quarter result on record.

Mail services used by larger businesses also exceeded their targets, including Mailsort bulk business mail services, Presstream for magazine and catalogue mail, and PPI (Postage Paid Impression) services for mail posted in pre-paid envelopes, the group said.

Managing director of Royal Mail Letters, Ian Griffiths, said: ‘The challenge we now face is to continue improving upon the consistent, high quality service we are delivering to our customers as competitors are becoming established in the UK mail market – which was opened to full competition from January 2006.’