1st class hits £1.70 and 2nd at 87p as GCA petition numbers keep rising
Royal Mail has announced yet another stamp price increase just as industry watchdog Ofcom revealed 10 April is the deadline for submissions about its proposals to slash the second-class delivery service.
And the moves come on top of RM admitting it is still missing delivery targets set out in the universal service obligation, despite being fined over £15million over the past two years, while the £5.6bn total takeover of Royal Mail and parent company International Distribution Services by Czech billionaire Daniel Křetínský’s EP Group is currently delayed due to a political crisis in Romania.
The price increases of 5p to £1.70 for first class and 2p to 87p for second class kick in on 7 April and was unveiled on Friday, 7 March – while lower than some feared, it still represents the sixth increase in just three years following previous inflation-busting hikes such as the 22% rise to £1.65 only five months ago, and means first-class stamps will have more than doubled since costing just 76p in 2020.
The GCA’s PR team at Arena PR were straight on the case to ensure the industry’s take on the situation was made clear with CEO Amanda Fergusson’s comments featured in The Times, Independent, Daily Express, The Sun, The Telegraph, Guardian, and BBC News reports, among others.
Explaining the new £1.70 price pushes a first-class stamp perilously close to the £1.89 average cost of a greeting card in the UK, Amanda said: “Here we go again. Yet again Royal Mail is asking people to keep paying more, for less, demonstrating the urgency behind our call for MPs to investigate Ofcom and Royal Mail’s plan to weaken the service.
“Our members – and their customers – know imminent plans to slash second-class services will leave them reliant on a first-class stamp at runaway prices.
“It’s time for MPs to act – they must make sure Royal Mail isn’t given carte blanche to make the postal service less reliable and unaffordable.”
She was referencing the GCA’s petition campaigning for parliamentary scrutiny of any changes to Royal Mail’s universal service obligation and threatened cuts to second class delivery, which has been publicised through the “Mi sing Let ers” social media campaign.
The industry association is calling on everyone who relies on greeting cards for their living to band together, pushing the number of signatories to at least 10,000, which will force the government to respond, with the target being 100,000 so it has to be considered for debate in parliament.
Following agitation from Royal Mail, Ofcom published proposals to slash second-class deliveries, where the price is regulated, to every other day – three days one week, two the next – and claims keeping six-day first-class deliveries would uphold the USO.
While the consultation doesn’t end until 10 April, Ofcom had already approved RM’s trial cutting of second-class deliveries to every-other-day and none on Saturdays, which started last month at 37 locations covering around three offices in each of Royal Mail’s 12 regions affecting roughly one million households, while first-class letters deliveries are still being made on all six days along with parcels even though the USO only applies to letters.
Royal Mail blames its continuing poor performance on what it terms a challenging financial position, claiming the cuts to service levels are needed to save money as letter volumes have decreased dramatically, from 20billion in 2005 to 6.7bn in 2024 with the majority of people saying they now only use the post to send greeting cards – although IDS said revenues had increased by 10% in the six months to the end of September 2024, compared to the same period in 2023, and its operating loss was down to £26m from £234m the year prior.
However, although first-class service levels improved slightly in the third quarter between 30 September and 1 December, 2024, to 76.2% arriving within one working day, it’s still way off the 93% target specified in the USO, while 92.0% of first-class post was delivered within two days but, for second class, only 92.3% was delivered within three working days against the 98.5% target, with 98.5% arriving within five days.
In 2022-2023 the levels were 73.7% and 90.7% respectively, leading to a £5.6million fine from Ofsted, while the slightly-improved 2023-2024 levels of 74.7% and 92.7% garnered a £10.5m fine reduced from £15m to reflect the company’s admissions of liability and agreement to settle the industrial action from the previous year.
Of the latest price rises, Citizens Advice director of policy Tom MacInnes said millions of people would be forced to pay more while suffering from postal delays: “It’s unjust for Royal Mail to raise the price of a second-class stamp, while the regulator Ofcom looks at reducing second-class deliveries to alternate weekdays.
“As first-class stamps are becoming unaffordable, people could be forced by price pressures into choosing a slower service.”
Royal Mail and Ofcom have made no secret of the fact their proposals to weaken the postal service now need no intervention from government before implementation, bypassing parliamentary scrutiny after RM pulled back from its original plan to cut all letter deliveries to five days a week, which would have required changes to legislation.
In response, the GCA launched its petition – more detail is available on the association website, and it can also be accessed through the QR code in the picture above – calling on the government to amend legislation to require parliamentary scrutiny on any change to the USO and insist such changes would be dependent on Royal Mail meeting existing performance delivery targets for letters and cards.
It also wants new regulation for the price of first-class mail to avoid further above-inflation rises and that RM must maintain a national, affordable, and reliable postal service that supports High Streets and communities across the UK.
In the price rise announcement, Royal Mail said it “carefully considers prices, balancing affordability with the increasing cost of delivering mail” and explained that it anticipates letter volumes could fall to 4bn a year within the next four years, while the number of addresses in the UK has risen by four million over the past two decades, meaning the cost of each delivery continues to rise.
Nick Landon, chief commercial officer at Royal Mail, said: “We always consider price changes very carefully but the cost of delivering mail continues to increase. A complex and extensive network of trucks, planes and 85,000 posties is needed to ensure we can deliver across the country for just 87p.
“Ofcom has recognised that reform is urgently needed to protect the one-price-goes-anywhere Universal Service which requires Royal Mail to deliver letters to around 32m UK addresses six days a week. Reform will allow continued investment in the modernisation and transformation of the business to provide a more financially sustainable service.”
