Page last updated at 15:30 GMT, Tuesday, 28 February 2012

BIS Committee

Royal Mail's chief executive has said that stamp prices will "almost certainly" have to rise but families will not notice the impact on their household budget.

Speaking to the Business, Innovation and Skills Committee on 28 February 2012, Moya Greene refused to be drawn on how much any increase might be.

Asked whether consumers would feel the pain of a price rise, she said: "We don't think there is an affordability issue. This is not like electricity or gas."

She confirmed that there would be a "reprieve" from any stamp price rise in the run-up to Christmas, stating that Royal Mail will charge 2011 prices for festive mail in 2012.

Ofcom, which has taken over regulation from Postcomm, has made the proposals to remove price caps on first-class stamps and raise the price limit on second class to as much as 55p owing to "huge changes" in the industry.

The organisation said its proposals, announced in October, were designed to make sure UK consumers continued to benefit from an affordable, universally-priced postal service six days a week, at a time when postal use was declining as many people had turned to new technology.

The cost of a first-class stamp is currently 46p. Under the plans, Royal Mail would be allowed to set this price at a level it considered to be appropriate and competitive.

However consumer groups have warned that an increase in stamp prices could have a disproportionate affect on elderly people.

Business, innovation and skills committee membership

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