Price of a stamp 'to rise to a record 46p'

The price of a first class stamp could rocket to 46p, the largest ever increase in cost, after the Post regulator said the change was need to sustain a six-day service.

Stamped on: Stamp prices may have to rise.

The move, given the green light by the postal regulator yesterday, was attacked as 'an extra tax on the public'.

At present, a first class stamp costs 41p. But from April, Royal Mail will be able to charge up to 46p - a record rise of 5p.

Regulator Postcomm also said it was ripping up rules which limit how much the company can charge for packages weighing more than 500g.

And the price of a second class stamp will be allowed to jump from 32p to 36p - meaning one will cost the same as a first class stamp did only two years ago.

The timing of the rises could not be worse for cash-strapped consumers who are already bracing themselves for rises in VAT and job cuts next year.

But Postcomm, whose chief purpose is to protect the universal service, said it has no choice but to allow the record-breaking rise because Royal Mail's 'financeability' was 'under serious threat'.

Postal experts attacked the move. In 2000, a first class stamp cost just 27p.

Labour MP and deputy Speaker Lindsay Hoyle said the rise was 'an extra tax on the public', adding: 'Do you not think they are paying enough at the moment?' He described the move as 'outrageous' and 'unacceptable', and said he was concerned about the impact on small businesses, which often rely on the post.

Royal Mail said it was too early to say exactly how much the price of stamps will increase by next April. But yesterday's announcement from Postcomm gives the company the option to charge up to 46p. A formal decision is likely next month.

Robert Hammond, head of post at the watchdog Consumer Focus, said: 'Consumers can't be expected to bail out an inefficient Royal Mail for ever.'

And Billy Hayes, general secretary of the Communication Workers' Union, said: 'The public should realise this is a sign of things to come under a privatised Royal Mail.'

It comes as Postcomm published a report showing that nine in ten consumers and businesses say it would be 'acceptable' to scrap Saturday collection and delivery if it meant stamps staying at the current price. But LibDem MP Ed Davey, who is minister for postal affairs, said that the Government had 'no intention' of downgrading the six-day universal service.

The Government will today announce how it plans to protect the country's network of loss-making Post Offices.

It is likely to allow all customers to be able to access their bank account from a Post Office, as well as passing more Government business to the network.