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Ofcom to veto Royal Mail price increases
19th Jan 2012
Massive increases to the price of posting mail in the UK will harm small business such as dental practices and hasten the demise of the Royal Mail.
In a letter to Ofcom, the not-for-profit group, the Forum of Private Business, has urged the industry regulator not to allow Royal Mail bosses to go ahead with radical reforms which could drive the price of a second class stamp by as much as 50%.
Ofcom is currently consulting on the proposals which are part of a huge shake-up planned by Royal Mail executives who say the changes will allow it to become profitable again, but could see second class stamp prices rocket from 36p to 55p.
Other proposals being considered are no-limit increases for the price of a first class stamp until 2018 which would not require Ofcom approval as per current rules.
Royal Mail, whose letter business lost £120 milion in 2011, have submitted the proposals to Ofcom who have to agree to any price revisions before they can be implemented.
But the Forum has warned the industry watchdog that agreeing to them would simply create another cost barrier to trading for small firms reliant on postal services who can ill afford further price hikes.
'We understand that Royal Mail is currently a loss-making organisation and action needs to be taken to address this, but we believe constant price rises are not the way to tackle the issue,' said the Forum's head of campaigns, Jane Bennett.
'Small businesses are regular users of the service and would be the hardest hit by any increases, and it's these businesses which are already experiencing high business costs.'
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