The SNP have questioned the UK Government’s commitment to supporting small business after warning over the impact of proposals to give Royal Mail powers to charge an unlimited price for first class stamps while the cost of second-class postage could rise by more than 50 per cent.

While small businesses pay full stamp prices, large businesses, who send a lot of mail, benefit from bulk discounts from Royal Mail.

SNP Business and Enterprise spokesperson Mike Weir MP made the warning as Ofcom and Consumer Focus give evidence over the future of stamp prices to a Commons committee.

Proposals by Ofcom suggest there should be no cap on prices for the vast majority of Royal Mail’s services, including business post, bulk mail, and large letters and parcels sent second class.

Mr Weir said:

“The UK Government’s commitment to supporting small businesses is in real question over these damaging proposals.

“The removal of the cap would have very serious consequences for small businesses who rely heavily on Royal Mail’s services and the proposals come at a time when many are all ready under real pressure.

“While large businesses who send a lot of mail will never pay the full first class price but benefit from bulk discount from Royal Mail, or have the option of doing a deal with one of the alternative private providers, these options are not available to small businesses.

“Small businesses rely on Royal Mail’s service to be able to deliver letters and packages around the country. They could be priced out of the market risking their very survival.

“The Ofcom proposal would allow Royal Mail to charge whatever it wanted for first class services while the cost of second-class postage could rise by more than 50 per cent.

“An increase in postage prices could result in a downward spiral, with less people sending letters, and in turn leading to even higher prices.

“Such an outcome cannot be allowed to stand. If we are to get ourselves out of this current economic mess the driver will be from small business and the UK Government and Ofcom must take this into account in determining the proposals.”