House of Commons Library

Postal services

Published Thursday, December 14, 2017

This note gives an overview of postal services in the UK. It discusses current regulation, market trends and consumer problems.

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Section 1 describes the key actors in the UK postal market and the relationships between them. This section also introduces key terminology used to describe the UK postal market.

The UK postal market is dominated by Royal Mail which is both the largest operator and the ‘universal service provider’. Ofcom is the regulator of UK postal services and focuses much of its regulatory activity on Royal Mail as the universal service provider.

Section 2 tackles frequently asked questions regarding postal services both in light of consumer issues and policy developments.

Section 3 lays out the regulatory framework of UK postal services.

Section 4 sets out trends in the UK letters market. UK letter volumes have been in decline since the mid-2000s.

Section 5 describes recent trends in stamp prices. Ofcom granted Royal Mail price flexibility over stamp prices in 2012. Since then the price of a 1st Class Stamp has risen substantially. A 1st Class Stamp is priced at 65p as of April 2017, 67% higher than the face value of a stamp in 2010.

Section 6 sets out trends in the UK parcels market. The UK parcels market is currently going through a period of strong growth. This growth has coincided in increasing competition. Poor quality of service and parcel surcharges in Scotland and Northern Ireland have caused consumer groups concern in recent years.

Section 7 explains the recent performance of Royal Mail. Royal Mail have increased profits after tax rapidly over the last five years. Reporting profits after tax of £438million in 2016/17, £218million more than in 2012/13, an increase of 99%.

Complaints to Royal Mail have increased slightly in recent years. Royal Mail have also recently failed to meet two of their key performance indicators set by Ofcom (see Section 7 for details).

Commons Briefing papers SN06763

Authors: Jennifer Brown; Lorraine Conway

Topics: Consumers, Postal services

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