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Postcomm Approves UK Stamp Rise, Proposes New Price Caps

News, 06 February 2003

Britain’s beleaguered postal operator has been given the green light to raise stamp prices by regulator Postcomm.

Royal Mail Group – currently bleeding around £1 million ($1.6m; €1.5m) a day – will raise the cost of first and second class stamps by a penny to 28p and 20p respectively. It will also have the option to put up second class stamps by a further penny next year.

The price rises, which will come into effect on April 17, are projected to generate an extra £750m in the next three years.

However, Postcomm risked the wrath of Royal Mail chairman Allan Leighton by proposing a revised range of price controls for the rest of the operator’s activities. Leighton has been furiously lobbying against such a move.

“The question Royal Mail's board now faces is: do these complex and tight price control proposals give us sufficient financial headroom over the next three years?” the chairman fumed.

“If the answer is no, then our ability to provide a one-price universal service will be destroyed and we will have to trigger a reference of the proposals to the Competition Commission.”

Royal Mail will respond to Postcomm’s proposals in 28 days.

Data sourced from: multiple sources; additional content by WARC staff