Royal Mail CEO signals increase in cost of stamps

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  By Martin Kelly
 
The cost of stamps may have to increase following the sell-off of Royal Mail, the company’s CEO has admitted.
 
Speaking to Sky News, Moya Greene said the postal operator’s products were cheaply-priced compared to many European rivals and that the company would need to be more competitive.

“We are very proud of the value that we provide for 60p, but we also know that in that field, where we have structural decline on the letters side, we have to be very careful about pricing,” she told SKY News.

“We are very pleased that if you compare our prices to other countries in the European Union, if you look in various weight categories between zero and 100g, we are at the low to middle of the spectrum.

“I don’t think you’re going to see a company that is going to be senseless about the pricing lever … we need to stay competitive and retain the loyalty of our customer base.”

Asked if that meant a price rise was imminent, Ms Greene added:

“Well, we didn’t raise stamp prices last year… The average UK household spends 50p each week on stamps.  We have to price only for the value that we deliver.”

Ms Green’s comments follow the sell-off of Royal Mail by the UK coalition.  The UK Government has been accused of setting the price of shares too low and costing the taxpayer £1bn. 

Royal Mail shares hit a high of 491p in trading, which was almost nearly 50 per cent above last week’s flotation price of 330p.  The shares eventually closed at 489p, valuing the company at £4.9bn.

Ms Greene dismissed the claims, saying: “I think the Government has handled the execution of this very well to give us a very broad shareholder base.

“I think it is important that Royal Mail remains a British company.” She said.

The company is free to set the price of first class stamps until 2019 but not second class stamps, which are out-with its control.

Commenting, SNP spokesperson for postal services, Mike Weir MP said:

“Sadly, the increase of stamp prices could have been predicted following the UK government’s decision to privatise Royal Mail.

“The privatisation was a deeply flawed Westminster decision, which threatens to have particularly harmful consequences for Scotland where so many of our rural communities and so much of our rural economy rely on our existing Royal Mail service.

“The UK Government refused to heed the real and genuine concerns that privatisation will mean a reduction in rural services as companies cherry-pick and compete in the larger urban areas.

“Given our experience of previous privatisations no one believes that the regulator will provide real protection to consumers on either prices or services.”

The SNP and Scottish Government called for a moratorium to stop what they claimed was a rushed Westminster sell-off and have promised to take Royal Mail back into public ownership in an independent Scotland.

The Labour leadership has indicated it will not re-nationalise the Royal Mail if it wins the next UK General election.  The decision ignored the wishes of party members after delegates voted in favour of a motion to reverse last week’s sell-off at the recent party conference in Glasgow.