Royal Mail postpones stamp price increase

LONDON - Royal Mail has postponed putting up the price of first and second class stamps to May 8 at the earliest, following Postcomm's decision to extend the deadline for its consultation period on changes to the postal operator's price controls and compensation payments.

Royal Mail had been set to raise the cost of first and second class stamps by 1p on April 17, but changed its mind following Postcomm's announcement at the end of last month to extend the consultation period.

Jerry Cope, Royal Mail's UK managing director, said: "We want to give our customers as much notice as possible of any change and as much clarity as we can to help them plan."

Last month, Postcomm said it would extend its consultation period to March 21 from March 10 after consumer body Postwatch lobbied for more time to consult with customers of Royal Mail, including direct marketers, about Royal Mail's new pricing proposals.

The proposals include the introduction of size-based pricing, which would see direct mail packs charged on their size as well as weight. There are concerns that this will limit creativity in direct mail because the cost of mailing larger-than-average envelopes would rise.

At the time of the announcement, Postwatch chairman Peter Carr said: "Postwatch needs as much time as possible to be able to gather feedback from its regional committees and networks, as well as the mailing industry, in order to better understand how the customers will be affected."

Although Postcomm said at the time it didn't expect the deadline extension to effect the timing of Royal Mail's price rise, the postal operator believes it has no choice but to delay the move.

Cope said: "But this consultation involves others as well as Royal Mail, and the regulator's recent announcement of a longer consultation period means there can not be any certainty until at least March 21, almost a year since the application for a 1p price increase was made."

Royal Mail is also looking at whether or not to accept Postcomm's proposals, which would see compensation payments being made to customers in the event of poor service as a condition of the price increases.

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