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SMEs hit by planned Royal Mail price increase

Sme Or Small And Medium-sized Enterprises On Black Block

The Forum of Private Businesses has warned in a letter sent to Ofcom that increasing the cost of postage in the UK will add further burden to Small and Medium Enterprise, while damaging Royal Mail. The FPB has urged the regulator to prevent Royal Mail from increasing postage prices, which could result in the cost of a second class stamp rising up to 50 percent.

Consultations are currently taking place as part of reorganisation plans for Royal Mail. Executives at the mail company believe that increasing prices of postage will increase company profits. The cost of a second class could cost up to 55p from the current price of 36p. Royal Mail executives are also considering increases to the first class stamp, with no limits till 2018. Under current regulations, approval from Ofcom isn’t required for this proposal.

The proposals from Royal Mail have been submitted to the industry regulator, and are hoping the planned increases will be approved by Ofcom. In 2011, £120 million was lost by the letter business. According to FPB, the postage price increases will further burden small businesses, especially those who are reliant on the postal service and will struggle to meet further business costs. The head of campaigns for FPB, Jane Bennett said:

“Small businesses are regular users of the service and would be the hardest hit by any increases, and it’s these businesses which are already experiencing high business costs.”

The most recent Referendum survey which is carried out quarterly by FPB reveals that 97 percent of companies surveyed have seen business costs rise in the last 12 months.

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