First-class stamps price set to rocket… despite Royal Mail making £1m a day

First Class Stamps

The price of First Class postal stamp is to shoot up astronomically, according to confirmed reports.

This is despite Royal Mail making profits of nearly £1million a day.

At present, the company charges 46p for a first-class stamp under a strict regulatory regime.

But the new postal regulator, Ofcom, sparked outrage last month when it revealed plans to scrap the cap, allowing Royal Mail to charge as much as it likes for a first-class stamp.

Royal Mail yesterday revealed it made profits of £171million before tax between the end of March and the end of September.

This is equal to around £940,000 a day, including weekends, and compares to a loss of £55million during the same period last year.

Under Ofcom’s proposals, just one single price control will remain – the price of a second-class stamp, which has soared from 19p in 2000 to 36p today.

 It is thought this may be allowed to rise to between 45p and 55p.

Delivering results: Royal Mail made profits of around £940,000 a day

A spokesman for the official pressure group Consumer Focus said: ‘Royal Mail is going through a major transformation, including modernisation and operational changes, as well as changes to its regulatory regime.

‘This must not divert attention from the fact it delivers an essential universal postal service which needs to be affordable and reliable.’ 

The Government has been looking to privatise Royal Mail. which said its financial results were boosted by property sales – including its Rathbone Place depot in London’s West End.

Royal Mail, which recently claimed to be ‘insolvent’, said the number of letters posted has continued to fall sharply, from 80million a day in 2005 to 59million today.

‘We expect annual declines for the foreseeable future,’ said chief executive Moya Greene.

The company continues to haemorrhage staff as it battles to urgently modernise, such as sorting out the mail by machine, rather than by hand.

Over the last 12 months, 5,000 people have left the business, including 2,000 who either worked at its head office in central London or did other managerial roles.

Overall, they have lost 50,000 full-time equivalent employees over the last decade. Yesterday Miss Greene said job losses will ‘continue’, triggering a huge redundancy bill.

The postal union, the Communication Workers’ Union, yesterday called on Royal Mail to share its success with its staff, whose shares have been deemed worthless.