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Royal Mail to be saved by stamp price increase

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Pound coins on first class stamps
Profile photo of Patrick Steen Patrick Steen Conversation Editor
Comments 13

Stamp prices could increase by up to 5p next year. Are you willing to spend more to help Royal Mail compete with rivals and safeguard its universal service?

Following the government’s announcement to privatise Royal Mail, the postal regulator Postcomm has said that it will be allowed to increase its stamp prices by up to 10%.

This could mean an extra 5p on first class stamps and 4p on second class, bringing them to 46p and 36p.

Sure, that doesn’t sound like much, but this would be an unprecedented rise for the first class stamp. And there are more rises – the regulator thinks Royal Mail should have the flexibility to charge more in order to help it compete and modernise.

And although Royal Mail has yet to make a decision on the future price of its stamps, it’ll also be able to charge big businesses even more. The impact of these costs on banks and energy companies, for example, is likely to be passed onto us.

Letter sending at 15-year low

However, the reality is that we’re just not sending as many letters as we used to. In fact, letters sent through the post are at a 15-year low, with the average daily postbag down by 16 million since its peak five years ago.

This has turned profits into huge losses for the Royal Mail this year. So what’s to blame? Apparently it’s growing competition from postal rivals, emails and social media.

Which raises the question; does anyone really want or need to send post anymore? Mine’s limited to birthday cards and online orders, and even then I’ve become partial to send the less satisfactory e-cards.

What would you sacrifice for the Royal Mail?

When Postcomm and Consumer Focus asked UK households and businesses whether they were prepared to make sacrifices in order to save the Royal Mail, most were willing to put up with higher stamp prices and even to let go of Saturday deliveries. What would you be willing to give up? How about those much-wanted evening deliveries?

Even considering the rapid fall in letters sent, should Royal Mail pass the burden onto us?

Comments
13
John says:
10 November 2010

I still use the Royal Mail quite a lot, even for local letters which I could deliver myself. There are so many things that I send or receive for which there is no convenient and economical alternative. The plethora of card shops in my nearest town and the fact that my local post box is frequently full to overflowing suggests that it is not private residential mail that is drying up but the business volume as companies now use alternative channels for correspondence and deliveries. I prefer to write a letter to sending an e-mail message as I feel it carries more weight and it may be easier for the recipient to deal with. I don’t want to become dependent on the internet, and indeed, there could in the foreseeable future come a time when I shall not be able to, or want to, use the internet. Furthermore, I doubt whether I shall continue to be able to afford to use a computer [taking account of ISP charges, virus protection, paper, ink, electricity and repair costs]; the cost of postage is trivial alongside all these expenses. If the universal postal service ceases then many people in the country areas will suffer a major deprivation. Although I have signed up to receive telephone and utility bills on line it is primarily for financial reasons and not for convenience – I pay less attention to the bills if they are sitting in my in-box than if I have to physically take them out of an envelope. I have resisted pleadings from banks to get statements on line but it is only a matter of time before they start charging for posted statements – during the run-up to abolishing cheques [yet another dire threat to our civilised way of life] the banks will probably stop mailing out cheque books and send us an e-mail requiring us to collect them from a nominated branch. Nobody suggests that the miles of unused rural roads should be abandoned – their ongoing maintenance is a cost to society that just has to be borne and the same should be true of the Royal Mail. I feel that the permitted rise in postal charges is a small price to pay for the immense benefit of having a universal daily postal service. And some questions to Patrick . . . do you like receiving e-cards? do they look good on your window-cill? do you look at them again and again? would you send them to your grand-parents? – stop being a meanie, buy a stamp!!

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Patrick Steen says:
11 November 2010

John – I don’t mean to be a meanie, but e-cards are not only convenient. They’re immediate, they don’t waste paper and they’re interactive. Plus, I think I actually spend much more time picking a good e-card than when I pick an actual card from a shop (hours compared to minutes).

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Steve Kelly says:
10 November 2010

I’d be more than happy to pay more for a stamp. It is still a genuine bargain.
But would the increase be used to ‘Save Royal Mail’ or to make the company profitable ready to be sold off to a foreign company.
Let me think ….

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Stephe says:
10 November 2010

Given the fact my hubby is a postie I know personally that mail volumes are NOT falling!
My hubby and his workmates have just voted in favour of taking a real life pay decrease to make the company more efficient and modernised in order to keep their jobs! Maybe if the fat cats sat at the top of the ladder took some direction from the real workers, the posties the company would be ok.
And, even if people do use other companies they STILL end up being delivered by Royal Mail! The number of letters sent using TNT etc, that TNT take a decent price for then pay RM around 2p to deliver is ridiculous!
As for privatising it – My hubby has recently been asked by DHL, City Lin, TNT and UPS delivery drivers (who had sat navs switched on in their vans) for directions to houses on main roads! If they can’t even find a main road how are they going to deliver properly, especially to rural areas? They would have us all using a central PO Box in the nearest large town/city and it would be down to us to truge however many miles to get the post.

Stick the price of the stamp up if needed, I don’t mind paying extra to sto it being privatised, just make sure those fat bums at the top do not recieve a penny of the extra money!

The service now is what is needed, keep it that way.

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shire of rose says:
11 November 2010

Only 5 pence rise in stamps !. Royal Mail will not survive for tiny rise. We can see rise in fuel , food ,parking charges, airport tax,bus and train fare,council tax, and vat. They all rise in pound figure but when penny rise in Royal Mail stamps , we all start criticism and moan about penny rise !….We have never seen that post.com has fined any private postal companies past few years. Only Royal Mail is heavily fined by post.com. Restriction and fine has brought the best British brand Royal Mail from top to bottom.Private companies has taken advantages to take over cream work of Royal Mail. Royal Mail suffering like a bullet injuries. Now Govt has decided to privatise Royal Mail. Another shock after shock. Once it is privatise, we all will amazed on huge stamp rise like a private rail companies. Compare postal prices from TNT,UPS,DHL etc with Royal Mail. Royal Mail is much cheaper than private companies. Royal Mail should charge minimum 50 pence to one pound to send letter without any restriction from post com.PRIVATISATION IS NOT THE REMEDY TO SAVE OUR BEST BRAND ROYAL MAIL. When we see red van with queens emblem on it, we feel more proud of British success. It is sad that our politicians are selling best British company to the private company.

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JAC says:
18 November 2010

Royal Mail should remain Royal Mail. Britain was the first to have Royal Mail stamps – and how can one have Royal Mail if mail services are privatised (any more)? OK, so there are difficulties over finance, but TRADITION and PRIDE should have their place…

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Chris says:
21 December 2010

Unfortunately the Royal mail is a dead duck

I’ve just had two major issues with lost cheques between Barclays bank and their Life assurance branch.

They put in in the mail.

Also I’ve had to report thefy from the local branch of memory chips, for home and for work.

ALL my courier mail and parcels arrive on time- it’s time to go private.

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Matthew says:
24 March 2011

I use a PO Box for my business. I am a one man band with a modest profit margin (about £40k per annum). Last year the annual fee for my box was £95. This year (2010 – 2011) it is £170. I was staggered when I received this year’s invoice. I phoned customer inquiries and asked whether there had been some sort of mistake and on being told there had not asked them to justify their 80% fee increase. I was told they were “not allowed” to charge much cheaper prices than their competitors due to “regulations”. What guff ! I note with interest the Royal Mail’s website is still quoting its old prices. I read the thread above with interest. Whilst I am happy in principle to support the Royal Mail and recognise its value, both in terms of Britain’s cultural landscape, and the services it provides to less “profitable” areas of the country, the above rise is ridiculous. What is more Royal Mail did not even think to include a brief letter with the invoice explaining its fee increase. At least this may have sweetened the pill. If they wish to compete with other providers they will need to provide similar levels of customer service as well.

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Mike Tyler says:
1 April 2011

This just got worse. The prices on the website (£95) are currently correct, as the prices increase in April. My invoice dated 28/3/11 is for £170. They said it is because it will be paid in April after the price increase (30 day terms).

I rang customer services and after a half hour, they said they would do nothing as that was how it ie. The PO review answered that they don’t deal with price structures.

Spoke to my postman today and said that ‘on the ground’, the guys are great and the service we get is brilliant. Shame about the ‘suits’ Management are complete idiots if they think this a business strategy.

After 14 years I have cancelled the service.

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richard says:
1 April 2011

Well I use Royal Mail a lot – 1000s of letters a year – Most of the recipients are not on the Internet – so exactly how is e-mail any good to them? Letters are delivered all over the country for the same price – wonderful service!

In the last 30 years – just two items sent by royal mail have been ‘lost’ – one actually delivered 3 months late.

Support the Royal Mail – buy stamps! – The company is worth saving

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Patrick Steen says:
5 April 2011

Thanks to Matthew and Mike Taylor for their comments on the increase of price for renting PO Boxes.

We have now written about this in a new Conversation and used your comments to illustrate distress from these new charges. Although people are willing to pay more for a stamp, the 80% price rise on a PO Box seems like it’s much tougher to bear:

https://conversation.which.co.uk/money/royal-mail-stamp-po-box-price-rises/

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simonenelson says:
31 March 2012

I have run mail order businesses since 1996 – for the first seven years its was food so very time sensitive. At Christmas time it was 3000 parcels or so – if we lost 10 that was a bad year. Now my business is less seasonal and not time sensitive. I have always stuck up for Royal Mail as I think their service is second to none. Posties are wonderful folk who know just where to leave that parcel if you are out – whereas a carrier always takes it back to base – God knows where!

As I a business I know Royal Mail needs to do more than break even and I want it to modernise but go on giving this wonderful service; my clients are always impressed that they get next day service without it I could not run my business. Carriers are not on for small items!

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wavechange says:
13 September 2013

The privatisation of Royal Mail has finally arrived, and no doubt we will be having a new Conversation to discuss whether or not this is a good move. Will it be better when the country owns it or many have a share as shareholders?

Has Postman Pat been consulted?

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