The Royal Mail is planning to keep stamp prices this Christmas the same as last year for people of "modest" means, the postal group's chief executive revealed.
Moya Greene said she realised any increase in stamp prices was a problem for some families, especially at Christmas, the busiest time of the year for post.
She told the Business Select Committee that the Royal Mail was planning a special programme this Christmas under which the cost of posting letters and cards would be the same as last year for those with modest means.
According to a report in the Daily Mail, the details of how the 'two tier' pricing system will operate have yet to be revealed but it is expected that those receiving benefits - including pension credit, incapacity benefit and its successor employment and support allowance, will have access to the lower price range.
The Royal Mail is expected to announce soon that stamp prices will rise from the current 46p for first class and 36p for second class post.
She told MPs the core business had lost £1 billion in four years and until very recently was cash negative, putting the universal service "in peril".
The Royal Mail wanted to retain customer loyalty as well as achieve a rate of return on its products and services in a "very complex" market, she said.
She defended the current cost of stamps, saying there were few things anyone could buy for 46p, describing the cost of a first class stamp as "very high value", with letters being delivered anywhere in the UK a day after posting. Ms Greene said no decision had been taken on the future price of stamps.
The UK has the seventh cheapest first class service in the European Union and the second lowest second class prices.
Mail volumes have fallen by 25% in the past five years, with the daily postbag falling from 84 million items to 59 million. The Royal Mail expects volumes to decline by around 5% a year for the foreseeable future even though the number of addresses is increasing - up by two million to 29 million since 2003.
Families spend an average of 40p a week on postal services, the Royal Mail estimates, equivalent to 0.1% of average weekly expenditure.
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