Warning over rise in postage

LOCAL MP Mike Weir has questioned the UK Government’s commitment to supporting

small business after warning over the impact of proposals to introduce unlimited pricing for stamps.

If given the go-ahead, Royal Mail would be given powers to charge an unlimited price for first class stamps while the cost of second-class postage could rise by more than 50 per cent.

Mr Weir, SNP business and enterprise spokesman, said small businesses which pay full stamp prices would be hardest hit while large businesses, who send a lot of mail, benefit from bulk discounts from Royal Mail.

The warning came on Tuesday as Ofcom and Consumer Focus were due to give evidence over the future of stamp prices to a Commons committee.

Ofcom proposals suggest there should be no cap on prices for the vast majority of Royal Mail’s services, including business post, bulk mail, and large letters and parcels sent second class.

Mr Weir said: “The UK Government’s commitment to supporting small businesses is in real question over these damaging proposals.

“The removal of the cap would have very serious consequences for small businesses who rely heavily on Royal Mail’s services and the proposals come at a time when many are all ready under real pressure.

“While large businesses who send a lot of mail will never pay the full first class price but benefit from bulk discount from Royal Mail, or have the option of doing a deal with one of the alternative private providers, these options are not available to small businesses.

“Small businesses rely on Royal Mail’s service to be able to deliver letters and packages around the country. They could be priced out of the market risking their very survival.”

Mr Weir added that an increase in postage prices could result in “a downward spiral”, with fewer letters sent, leading to even higher prices.

He said: “If we are to get ourselves out of this current economic mess the driver will be from small business and the UK Government and Ofcom must take this into account.”