Planned price increases of postage could have a devastating impact on small businesses, who are already struggling to fight rising business costs, according to the Forum of Private Business. A letter which has been sent to Ofcom by the forum urges the regulatory body to prevent Royal Mail implementing reform which could result in the price of a second class stamp increasing up to 50 percent.
The proposals which are being considered by Ofcom, are part of a shake-up strategy by executives at Royal Mail who want to turn it into a profitable company once more. However, the proposals could see the price of second class postage increase to 55p. Royal Mail has also proposed increases for first class stamps, with no limit on the increases until the year 2018. The current regulations mean that Royal Mail doesn’t need approval from Ofcom for implementation.
In 2011, Royal Mail lost £120m on letter business, prompting submission of proposals to Ofcom for the price increases. The Forum of Private Business has cautioned that price increases will create a further barrier for small businesses which rely on the postal service. The head of campaigns for FPB, Jane Bennett said:
“We understand that Royal Mail is currently a loss-making organisation and action needs to be taken to address this, but we believe constant price rises are not the way to tackle the issue.”
Financial planning with your small business accountant is crucial to avoid a negative impact on your company, as a result of suppliers increasing prices.
