AS an Ofcom consultation including proposals that Royal Mail could have the power to charge an unlimited price on first class stamps, Mike Weir MP has warned this could have a strong impact on small businesses.
Proposals by Ofcom 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 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.
“The Ofcom proposal would allow Royal Mail to charge whatever it wanted for first class services while the cost of second-class postage could rise by more than 50 per cent.
“An increase in postage prices could result in a downward spiral, with less people sending letters, and in turn leading to even higher prices.
“Large businesses who send a lot of mail will never pay the full first class price but will always be able to get a better deal or bulk discount from Royal Mail.
“They would also have the option of doing a deal with one of the alternative private providers.
“These options are not available to our small businesses.
“They rely on Royal Mail’s service to be able to deliver letters and small packages around the country.
“They could be priced out of the market risking their very survival.
“While this is only at the consultation stage, it is worrying that that Ofcom seem prepared to let small businesses pay the price of ensuring that large companies get a better deal.
“Such an outcome would be completely perverse and cannot be allowed to stand.
“If we are to get ourselves out of this current economic mess the driver will be from small business and Ofcom must take this into account in determining the proposals.”