Royal Mail stamping on everyone

Wednesday, 30th September 2009 14:50 - by Resident IFA

I rarely get wound-up, but am vexed at today’s Royal Mail proposals to increase the cost of a first class stamp by 7.7% (3 pence). Second class stamps do not avoid the pain, seeing a 2p increase. These increases are condoned by Postcomm, the post industry’s regulator. They have accepted that Royal Mail’s finances are in a precarious state and allowed them to tear up the rules that capped price increases. The new prices are likely to result in Royal Mail raising approximately £100M in extra revenue in the following year. Of course, it could have the opposite effect and drive people away from using the postal service. As a small business owner, it aggravates me, turning my thoughts to lessening my postal usage and any alternative methods I can investigate. At least I have a little time as the new prices will come into force in April 2010. What with the recent strikes and continuing backlog of mail, Royal Mail looks a shambles of an organisation. I have been impressed in the past by some of their innovations...such as the piece of software called SmartStamp, which allows me to top-up my account and print off stamps from my computer/printer, rather than be regularly stocking-up at my local Post Office branch. Add to all this the fact that I rarely receive my business post before midday, then I think we are watching a compelling advert for the privatisation of Royal Mail. Surely, there must be a company, or amalgam of companies, that could manage the UK postal system more effectively and profitably? There are only so many price increases that the private consumer and small business customer will tolerate. To borrow an old phrase, they can’t keep ‘going to the well’ and expect us to fork out for their inadequacies. Concerned over cash inflows, carrying a disgruntled staff (what is left of them after 10,000 job cuts through ‘modernisation’), and a failure to move with the times...no wonder the Labour Party is holding an emergency debate on this very topic at their Conference today. Until next time...