Stamp prices have risen for the third time in 18 months, with first-class now costing £1.25, compared to £1.10 previously. The Royal Mail has attributed the latest price rise to cost pressures and a difficult economic environment. However, charity Citizens Advice called on regulator Ofcom to scrutinise the company following the “rocketing prices” which it claimed were contributing to rising household costs. Ofcom stated that Royal Mail required pricing “flexibility” to retain its financial viability. Prices had to rise due to the lack of reform of the Universal Service Obligation, which compels the company to deliver letters to all 32 million UK addresses six days a week, according to Royal Mail. Second-class stamps remain at their previous price of 75p.
The Citizen Advice policy director, Matthew Upton, argued that Royal Mail, which holds a virtual monopoly over an essential public service, and despite the company’s poor delivery services across the country this summer, has still increased prices. Ofcom countered that it limits second-class stamp prices to ensure that an affordable option always exists, particularly for those with lower incomes.
Royal Mail has long-sought reform of the Universal Service Obligation. As per the company’s estimates, the number of letters being delivered per year has plummeted from 20 billion in 2004-05 to seven billion in 2022-23, while the number of households has increased by four million. The company cited research conducted by Ofcom that speculates a Monday-to-Friday five-day-a-week letters delivery service would meet the requirements of 97% of small and large businesses.
Last year, Royal Mail reported an operating loss of £419m. The cost of strikes equated to a sum of millions affecting the company, and the labourers went on strike 18 times as part of a long-standing dispute regarding pay and conditions. However, in July 2022, the workers voted to approve a pay deal
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