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Royal Mail price hike

First-class stamps to rise to 60p

Royal Mail has announced that the price of first-class stamps is to rise by 14p to a record high of 60p, after pricing restrictions were partially loosened. A second-class stamp will go up from 36p to 50p.

Ofcom previously set a cap on the price of first-class stamps, but the regulator has allowed Royal Mail to set the price of first-class and business mail.  Second-class stamps remain capped at 55p but the limit will be linked to inflation.

The mail service has been running an annual loss of around £250m over the past four years as consumers and businesses have migrated to email. The number of letters posted daily has dropped from 84m to 59m.

The attempt to boost the Royal Mail’s revenue is linked to privatisation plans which could see the company sold or partially floated as early 2013.  

Moya Greene, the chief executive of Royal Mail, said that without the price rise the service was “at risk”. She added, “Royal Mail provides one of the highest quality postal services in Europe for among the lowest prices for both consumers and business. That service is under threat from declining volume, e-substitution and ever increasing competition.”


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Is anyone prepared to solve the NHS funding crisis?

As long as the political taboo on raising taxes endures, the service will be in financial peril. 

It has long been clear that the NHS is in financial ill-health. But today's figures, conveniently delayed until after the Conservative conference, are still stunningly bad. The service ran a deficit of £930m between April and June (greater than the £820m recorded for the whole of the 2014/15 financial year) and is on course for a shortfall of at least £2bn this year - its worst position for a generation. 

Though often described as having been shielded from austerity, owing to its ring-fenced budget, the NHS is enduring the toughest spending settlement in its history. Since 1950, health spending has grown at an average annual rate of 4 per cent, but over the last parliament it rose by just 0.5 per cent. An ageing population, rising treatment costs and the social care crisis all mean that the NHS has to run merely to stand still. The Tories have pledged to provide £10bn more for the service but this still leaves £20bn of efficiency savings required. 

Speculation is now turning to whether George Osborne will provide an emergency injection of funds in the Autumn Statement on 25 November. But the long-term question is whether anyone is prepared to offer a sustainable solution to the crisis. Health experts argue that only a rise in general taxation (income tax, VAT, national insurance), patient charges or a hypothecated "health tax" will secure the future of a universal, high-quality service. But the political taboo against increasing taxes on all but the richest means no politician has ventured into this territory. Shadow health secretary Heidi Alexander has today called for the government to "find money urgently to get through the coming winter months". But the bigger question is whether, under Jeremy Corbyn, Labour is prepared to go beyond sticking-plaster solutions. 

George Eaton is political editor of the New Statesman.