The price of a first-class stamp has gone up to 32 pence, almost 16 times what it was when the two-tier postal system was introduced in September 1968. The first first-class stamp cost 5d, a penny more than second-class. Like most innovations, it took a while to catch on. The secretary of the National Chamber of Trades called it a 'confidence trick'. Now, almost a third of the more than 80 million letters posted in Britain each day travel first-class. The Royal Mail loses five pence for every letter with a first-class stamp on, and eight pence if it goes second class. Franking machines are where the money is: last year's profit of £537 million came from 'business mail services', which subsidise 'social mail' - the kind with stamps on - 'such as personal letters and birthday cards'. They've still got some way to go - a £2.5 billion pension fund deficit needs filling - but it's an impressive turnaround for a company that in 2002 was losing a million pounds a day. A portion of last year's profit was divided among postal workers, who each received a 'Share in Success' payment of more than a thousand pounds - a relatively modest amount when you consider that the chief executive's share of the success was upwards of £2 million.

LRB 20 April 2006 | PDF Download