Ofcom and Royal Mail Announcements

[TrueBlueTerrier]

No:213/12
Ref: 21003
27th March 2012


TO: ALL BRANCHES WITH POSTAL MEMBERS


Dear Colleague

Ofcom and Royal Mail Announcements

The purpose of this LTB is to advise Branches of the Union’s response to announcements today from the regulator Ofcom and Royal Mail.

Ofcom has today set out the new regulatory regime for postal services that will apply from the end of March 2012. This follows a series of consultations to which the CWU has contributed over the last six months.

Ofcom’s proposals mark a significant change in the regulation of postal services. The Regulator has recognised many of the failings of the previous regulatory regime. It has acknowledged Royal Mail's difficult financial position and the threat this poses to the sustainability of the universal services.

The changes will mean significant deregulation, giving Royal Mail greater freedom to set prices and to innovate. Many of these changes are welcome and will help Royal Mail to compete and improve its financial position. However, while we recognise that stamp prices will need to rise, we have concerns over the future affordability of the universal service for domestic customers and small businesses.

Ofcom is removing price controls from universal service products and replacing them with a cap on second class stamps only. This cap will be set at 55p and will rise in line with CPI. There will be no cap on the price of first class stamps.

Following Ofcom's announcement, Royal Mail has since announced that stamp prices will rise to 60p for first class and 50p for second class from the end of April 2012. Again whilst recognising the need to increase prices and generate more revenue, we do have concerns about the level of these increases and the continuing affordability of the universal service for vulnerable and low income consumers and small businesses.

The position set out in this LTB has been consistent with the CWU contribution to Ofcom’s consultation. The CWU will be considering Ofcom's new regulatory regime in detail.

Full details of Ofcom's proposals can be found here: (http://consumers.ofcom.org.uk/2012/03/s ... service-2/" onclick="window.open(this.href);return false;)

Royal Mail's announcement on stamp prices can be found here: (http://www.royalmail.com/prices2012" onclick="window.open(this.href);return false;)

We have also attached a copy of the Union’s Press Release issued earlier today. (http://www.cwu.org/news/archive/stamp-p ... s-cwu.html" onclick="window.open(this.href);return false;)

Any enquiries on this LTB should be addressed to the DGS(P) Department.

Yours sincerely



Dave Ward
Deputy General Secretary (P)