Tag: Royal Mail

Royal Mail said yesterday it was “minded to accept” the final version of a four-year price control to 2010 that was proposed by its regulator this week. The state-owned postal operator said it would inform customers next week of price changes taking effect next month. The move represents a softening of the negotiating stance adopted by Royal Mail, which had earlier signalled it would reject the price control unless the government first agreed to its request for Pounds 2bn of state money. Negotiations with ministers over this funding are still continuing.

An extra penny could be added to the price of a first- class stamp to help Royal Mail absorb increases in its pension deficit, said Postcomm, the postal regulator. This would mean first class stamps would rise from 30p to 37p by 2010, according to the final version of proposed price controls published by Postcomm. The additional increase would be triggered if the Pounds 4.25bn pension deficit rose to more than Pounds 5.9bn. The latest price proposals are due to take effect on April 3, when first-class stamps will increase to 32p.

Following consultation on its final proposals, issued in December 2005, Postcomm has made only very limited modifications to Royal Mail’s price and service quality controls that will apply for the four year period commencing 3 April 2006. Accordingly, retail stamp prices can go up by no more than 2p this year (to 32p for first class, and 23p for second class). The modifications reflect feedback from stakeholders during the consultation period. These are now subject only to agreement with Royal Mail and to the statutory 28-day process required under the Postal Services Act. The changes Postcomm is making to the December proposals are designed to strengthen customer protection against Royal Mail’s dominant position and to provide further safeguards for the “one price goes anywhere” universal service.