Royal Mail first class stamps to hit £1?

The Save Our Royal Mail campaign group says the cost of a first class stamp could hit £1 within three years. Worries are mounting that a privatised operator would not retain the Royal Mail's current VAT-free status, therefore pushing up prices.

Another example of a soon-to-be privatised business supplying higher prices, and possibly lower standards?%VIRTUAL-SkimlinksPromo%
Save Our Royal Mail, launched by the CWU, contends that consumers and businesses could see prices rise if a privatised operator does not retain its current VAT-free status.

Royal Mail has countered the campaign's suggestion, saying that its status is dependent on HMRC, and nothing to do with ownership. A spokesperson said: "The VAT exemption would apply regardless of whether Royal Mail was in public or private ownership. Similar VAT exemptions are in place for Universal Service Products in Germany, Austria and the Netherlands. In each country the USP is privately owned."


Vince Cable has been preparing the way for a Royal Mail sale for some time, claiming falling volumes of post and capital investment pressure all point, logically, to a sell-off. Fattening the goose the price of a first class stamp soared last year, from 46p to 60p.

A sell-off would likely see big job losses, though Royal Mail has cut more than 40,000 jobs in the last decade. There would likely be question marks over how long a Saturday post service would be retained (longer term digitization could mean, some industry experts have suggested, a postal service being reduced to two or three times a week).

Although the Royal Mail claims lower post volumes have eroded revenues, Royal Mail has also changed the way it measures overall volumes. The old method was based on weight; this was then switched to a reduced estimate - contested by unions - about how many letters went through each post box.

Profits vs service?

"Privatisation is an old fashioned idea and poll after poll has shown the UK public don't want their mail service sold off to become profit, rather than service, driven," says Billy Hayes, general secretary of the CWU union.

"Everyone, including millions of small businesses, would be hit by rising prices and by the undoubted reduction to the one price goes anywhere, next day delivery, universal service."

Royal Mail have refuted the campaign's claim: "It is pure speculation to suggest that stamp prices could reach £1 in the next few years – in fact in 2013 there was no increase in the price of first class or second class stamps."

"Stamp prices, whether set under public or private ownership, are subject to significant competitive pressures. Customers have many alternatives to the post and there are now many postal providers.
"UK stamp prices are among the best value in the EU. In five of the six weight steps for First Class and Second Class mail, the cost of UK stamps are ranked in the bottom half of prices when compared with other European countries. In some cases, the UK is the cheapest."

What do you think? Should the Royal Mail be privatised? Let us know in the comments.

10 consumer rights you should know
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Royal Mail first class stamps to hit £1?

The law states that any goods you buy from a UK retailer should be of satisfactory quality, as described, fit for purpose and last a reasonable amount of time.

This applies even if you buy items in a sale or with a discount voucher. You may have to insist on these rights being respected, though.

Useful phrases to use when you want to show you mean business include, "according to the Sale of Goods Act 1979" and, if it's a service, "according to the Supply of Goods and Services Act 1982".

Some shops will allow you to exchange goods without a receipt, but they can refuse to should they wish.

If the goods are faulty, however, another proof of purchase such as a bank statement should work just as well.

If you attempt to return goods within four weeks of the purchase, your chances of getting a full refund are much higher as you can argue that you have not "accepted" them.

After this point, you can only really expect an exchange, repair or part-refund.

The updated Consumer Credit Act states that card companies are jointly and severally liable for credit card purchases of between £100 and £60,260 (whether or not you paid just a deposit or the whole amount on your card).

Anyone spending between these amounts on their credit card is therefore protected if the retailer or service provider goes bust, their online shopping never arrives or the items in question are faulty or not as described.

Start by writing to the agency asking it to either remove or change the entry that you think is wrong. It will investigate the matter and find out whether you have been the victim of ID theft or a bank's mistake.

Within 28 days from receipt of your letter the agency should tell you how the bank has responded. If the bank agrees to change the entry, they will authorise the agency to update their records. They should also send updates to any other credit reference agencies they use.

You can also contact your lender directly to query a mistake. If the lender agrees to the discrepancy, ask them to confirm this in writing on their letterhead and send a copy to the agency, asking them to update your file.

The FOS settles disputes between financial companies such as banks and consumers.

If a financial organisation rejects a complaint you make about its services, you can therefore escalate that complaint to the FOS - as long as you have given the company in question at least eight weeks to respond.

The FOS will then investigate the case, and could force the company to offer you compensation should it see fit.

Bailiffs are allowed to take some of your belongings to sell on to cover certain debts, including unpaid Council Tax and parking fines.

They can, for example, take so-called luxury items such as TVs or games consoles. However, they cannot take essentials such as fridges or clothes.

What's more, they can only generally enter your home to take your stuff if you leave a door or window open or invite them in.

You are therefore within your rights to refuse them access and to ask for related documents such as proof of their identity. If they try to force their way in, you can also call the police to stop them.

Private sector debt collectors do not have the same powers as bailiffs, whatever they tell you.

They cannot, for example, enter your home and take your possessions in lieu of payment.

In fact, they can only write, phone, or visit your home to talk to you about paying back the debt. As with bailiffs, you can also call the police if you feel physically threatened.

Thanks to the Distance Selling Regulations, you actually have more rights buying online or by phone than on the High Street.

You can, for example, send most goods back within a week, for a full refund (including outward delivery costs), even if there's no fault.

You will usually need to pay for the return delivery, though. The seller must then refund you within 30 days.

We enter into contracts all the time, whether it be to join a gym, switch energy supplier or take out a loan.

In most cases, once you've signed a contract, you are legally bound by it. In some situations, however, you have the right to cancel it within a certain timeframe.

Credit agreements, for example, can be cancelled within 14 days. And online retailers must tell you about your cancellation rights for any contract made up to stand up legally.

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