Stamp prices could soar by 43%

STAMP prices could rise by as much as 43%, it has emerged. The move would see first-class postage going up 5p to 33p and second-class rising a massive 9p to 30p.

These are the amounts the Royal Mail claims it is losing on every first and second-class letter posted.

Chief executive Adam Crozier warned that prices needed to be 'much more related to the actual cost of providing the service'.

He said the company lost £247m last year on personal letters and franked mail posted by small firms, a loss which was effectively subsidised by bulk business mail.

New competition was taking this business away from the Royal Mail, he said, putting pressure on the 'one-price-goes-anywhere' service.

The last rise, in May last year, saw second-class stamps go up 2p and first-class 1p.

Although the Royal Mail claimed it had no plans to increase prices, consumer groups said there was no doubt it was paving the way for rises.

A spokesman for Postwatch said: 'This clearly shows that they want to increase prices by as much as 5p on first class and 9p on second class stamps.

'Consumers will not welcome this at a time when service standards are still not acceptable.'

Royal Mail is covered by a pricing agreement with regulator Postcomm until 2006, which means no price rises could take place before then.