Stamp on price rises ...say the unions

First class stamp prices will rise Photo: Reuters

We now have two big new planks in place. First, last wednesday the EU gave the go ahead for the government to take on the Royal Mail's massive pension obligations.

Today the industry regulator Ofcom gave the post office much greater power to set its own prices.

Post box Credit: Reuters

There are safeguards about second class mail (it cannot rise more than 55p) but the price cap for first class has been removed.

These two measures make it far more likely that private investors will be interested in Royal Mail.

Today's announcement will act as a lightening rod to spark off a new debate about the whole process of privatisation.

A flavour of that has just been emailed from Billy Hayes, of Communication Workers Union saying:

Todays announcement from Ofcom is the natural progression towards full competition and privatisation of postal services where customers pay more and efficiencies are sought in the interests of profit not services

Meanwhile Ian Murray MP, Labours Shadow Minister for Employment Relations, Consumer and Postal Affairs, said:

An increase in the price of stamps will hit the elderly, vulnerable and millions of people who rely on the postal service, including small businesses and charities

Of course, the big consumer tip is stock up on stamps before the increase comes in at the end of April.

Also look out for special deal at Christmas - Royal Mail promise to offer big discounts for buying in bulk for the festive season.

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