The Royal Mail could set their own prices for stamps
Tuesday October 18,2011
By Louise Sassoon
ROYAL Mail is to be given powers to set its own stamp prices under a radical shakeup of the postal industry, it was reported last night.
The move, to be announced by media regulator Ofcom in the next few days, will be seen by many as paving the way for privatisation.
It is expected to appear in a consultation paper setting out reforms of how Britain’s postal market is regulated.
If approved it would be seen as a massive boost for Royal Mail, which has historically been compelled to seek approval from regulators for price rises and told how much it can charge competitors to use its services. However, service charges will have to remain reasonable and freedom to set stamp prices will only apply to first class mail.
The price of second class stamps will still be regulated to ensure those on low pay can afford to use the post. A first class stamp is now 46p and second class 36p.
Royal Mail could see a massive boost from the move Ofcom assumed responsibility for regulating Royal Mail from Postcomm this month. About 80 per cent of Royal Mail’s revenue is still subject to price controls.
Royal Mail bosses have recently voiced fears that the service will not survive unless pricing restrictions change.
Moya Greene, the chief executive, is believed to have lobbied Ofcom about many of the changes expected to be outlined.
The firm is struggling due to the growing popularity of emails and texts and thousands of jobs are likely to go. Labour tried to partprivatise Royal Mail in 2009 but the move stalled because of a lukewarm response. SEARCH UK NEWS for:
The coalition plans to overhaul the Post Office network and sell off Royal Mail by next year.
Royal Mail and Ofcom both declined to comment.