Businesses say new posting rules will cost a packet (From St Albans & Harpenden Review)

Businesses say new posting rules will cost a packet

9:21am Tuesday 15th August 2006 in News By Angela Knight

SMALL businesses fear changes to the Royal Mail's postal system will cost them more money, according to a survey of nearly 200 firms carried out by the Forum of Private Business (FPB).

While the current system is based purely on the weight of your items, the new system will be based on both the size, weight and thickness of the item. Prices will be based on three size formats - letter, large letter and packet.

From August 21, the first class price of a large letter weighing 750g and less than 25mm thick will drop from up to £2.89 to £1.31. But a large greetings card weighing less than 60g which currently requires a 32p stamp to send first class, will cost 44p to post.

Royal Mail claims that more than 85 per cent of stamped mail will be the same price or cheaper to send and that UK businesses will actually make savings under the scheme, with nearly two-thirds of all business mail being cheaper to send and a further 20 per cent remaining the same price.

But the FPB, which represents nearly 25,000 UK businesses, found that a quarter of respondents said the cost of their post would increase by 15 per cent or more.

The President of St Albans Chamber of Commerce Sandra Oldfield, who also owns Secretarial Services Ltd, in Upper Dagnall Street, St Albans, argued that the postal changes could lead to increased costs.

She said: "I think the fact that you are going to be charged £1 to send an A4 envelope is ridiculous. We are being penalised for good presentation. I'll be throwing away all my A4 envelopes. I'll be folding documents in half so that I can send them in C5 envelopes and I'm going to see whether I can use a C5 brochure from now on.

"We send out a Chamber of Commerce bulletin in an A4 envelope every two months. If we continued to do this, the cost would go up from £64 to around £200 under the new postal pricing system. I think it's very unfair."

The FPB's research analyst Andy Mowlah said the administrative cost of the new system would also be a burden.

He said: "It's rather ironic that this new system is designed in part to cut costs yet 60 per cent of respondents thought it would actually increase them.

He added: "Sixty per cent of respondents also thought the new system would mean extra time spent in administration, while 50 per cent didn't realise they may have to purchase a new franking machine."

Royal Mail spokesman David Dale said: "There are ways that people can ensure that they do not pay any more than they have to, for example by folding A4 letters in half to fit into C5 standard envelopes so that the postage is priced in the letter category rather than as a large letter."

Royal Mail will be delivering a Size Guide - containing the dimensions, weight and thickness specifications - to every address in the UK.

To find out more about the new pricing system call the customer helpline on 08456113113, ask at your local post office or log on to www.royalmail.com