Price of a first class stamp 'could soar to £1 in just three

[pinstripe]

http://www.dailymail.co.uk/news/article ... warns.html" onclick="window.open(this.href);return false;

The price of a first class stamp could soar to £1 in just three years if Royal Mail is privatised, a group campaigning against the move has said.

Save Our Royal Mail - set up by charities and pensioner groups to fight the expected sell off - said the cost would increase because other companies would be able to challenge Royal Mail's VAT-free status under competition law.

Bankers and government ministers are paving the way for a Royal Mail flotation. It is believed it could happen as early as the Autumn.

Stamps are exempt from VAT but lawyers have warned that if the Royal Mail is privatised, this exemption will be challenged – almost certainly successfully – by other delivery companies.

The price of sending a first class letter last year rose to 46p to 60p - an increase of 30 per cent.

If 20 per cent VAT was added the price would increase to 72p. A further rise of 30 per cent would see the stamp cost 94p by 2015.

The group has warned that even if VAT were not applied, the price of sending a first class letter would 'likely hit £1 in three/four years, assuming two increases in that period', The Daily Telegraph reports.

Brian Binley, a Conservative MP and member of the Business Innovation and Skills Committee - which oversees the work of Royal Mail - told the paper it was essential that the services currently enjoyed by the public can be guaranteed, before the Government rushes into selling off the group.

He added: 'This should include a very careful look at how future price rises will adversely affect businesses as well as people in counties like Northamptonshire.'

A Business, Innovations and Skills spokesman said the Royal Mail will continue to be the designated universal service provider regardless of its ownership.

They added that any change would not 'trigger a change in the current VAT exemption which applies to first and second class stamps as part of the one price, anywhere service.

A spokesman for HM Revenue and Customs declined to comment on speculation, as did Royal Mail.

Save Our Royal Mail is backed by the Countryside Alliance and the National Pensioners Convention, among others.

The postal union the Communication Workers Union is believed to have contributed towards the cost of the campaign group's website.

It will be launched today.

The CWU said in a statement: 'Privatisation often leads to higher prices, fewer services, and lower standards. It also risks a 'race to the bottom' when it comes to jobs, with redundancies and lower terms and conditions.

'This would be disastrous for postal workers and postal services. It would be a major step backwards, not an improvement.

'At CWU we believe that Royal Mail can be a successful company and remain in public ownership; protecting valuable postal services for all communities. We don't believe there are convincing arguments linking privatisation with greater success and we would like to see continued innovation under public ownership.'

Over the past five years the volume of letters sent every day has fallen by 10 million as people increasingly rely on other methods of communication such as email.

[chooch]

PUBLISHED: 03:31, 8 April 2013 | UPDATED: 10:12, 8 April 2013
Comments (106) !!

oh, 'dailymail.co.uk'..

[beria]

Variable Tariff as well I should think!

[houseoflords]

Countryside alliance? I remember them when the price of petrol hit £1 a gallon, not seen or even heard of 'em since then, their a bunch of waste of time Tory Farmers pretending to be working class people who pretend they care or NIBYs.

[UnhappyGremlin]

I welcome and encourage this action, though I think it will be futile.
It could be worthwhile putting up posters in PO's highlighting the website and the campaign. Though, social networking would seem to be the obvious, if slightly ironic choice.