A new campaign group launched to protect postal services has warned that privatising the Royal Mail could lead to higher stamp prices, fewer deliveries in the countryside and "rocketing" costs to small businesses.
Save Our Royal Mail, set up by groups representing the countryside, the elderly, small firms and the blind, urged the Government not to "rush headlong" into a sell-off.
A £1 first class stamp might not be far off if prices were no longer regulated and become eligible for VAT, warned the group.
The campaigners also said that free postal services for the blind would be under threat, a freepost service to British forces could be scrapped, and the Royal Mail's iconic red coloured pillar boxes could be lost.
Campaign director Mario Dunn said: "Save Our Royal Mail is a broad based and growing campaign. We want to take our message to the politicians – do not rush headlong into a sell-off if you cannot guarantee a privatised Royal Mail will constrain its prices and provide these services at their current level."
A Royal Mail spokesman said: "Stamp prices, whether set under public or private ownership, are subject to significant competitive pressures. Customers have many alternatives to the post and there are now many postal providers. It is pure speculation to suggest that stamp prices could reach £1 in the next few years – in fact in 2013 there was no increase in the price of first class or second class stamps."
"UK stamp prices are among the best value in the EU. In five of the six weight steps for first class and second class mail, the cost of UK stamps are ranked in the bottom half of prices when compared with other European countries. In some cases, the UK is the cheapest.
"Clearly, the rules governing the implementation of VAT are a matter for HMRC not Royal Mail. VAT exemptions for core postal service delivery products such as stamps, by universal service providers (USP), are in place in the vast majority of EU countries under the European VAT Directive. Under the Postal Services Act 2011 Royal Mail is the USP in the UK.
"The VAT exemption would apply regardless of whether Royal Mail was in public or private ownership. Similar VAT exemptions are in place for universal service providers in Germany, Austria and the Netherlands. In each country the USP is privately owned."
A Department for Business spokesman said: "Royal Mail will continue to be the designated universal service provider regardless of its ownership.
"An ownership change would not, therefore, trigger a change in the current VAT exemption which applies to first and second class stamps as part of the one price, anywhere service."ROYAL MAIL STATEMENT IN RESPONSESERVICES FOR THE BLIND
It is not true to say that the Articles for the Blind service that we are honoured to provide is under threat.
Royal Mail is very proud to provide the articles for the blind scheme, which cost a total of £6.2m to provide in 2011/12. The service, which provides free postage for blind or partially sighted people, is protected by law. It is included as a minimum requirement of the Universal Service in Section 31 of the Postal Services Act.
A change to the Articles for the Blind scheme can only happen if directed by the Secretary of State and voted for by both Houses of Parliament.FREEPOST SERVICE TO BRITISH FORCES
Royal Mail is very proud to deliver a free of charge service to our armed forces undertaking operations.
Free post to the armed forces does not depend on Royal Mail remaining in public ownership.
The Ministry of Defence fully reimburses Royal Mail for provision of these services. It is a Government decision, whether Royal Mail is under public or private ownership.PILLAR BOXES
Government has legislated to protect Royal Mail's heritage. The Government included an additional safeguard in the Postal Services Act 2011 to enable it to ensure that the Queen's head remains on stamps regardless of who owns the company in the future.
Royal Mail is very proud of its heritage, for example, we maintain 115,000 distinctive red postboxes across the UK. Royal Mail is also required by legislation to report annually to Parliament on its heritage activities.COUNTRYSIDE ISOLATED
Ofcom has made it clear that following a review of the needs of consumers and businesses, it is ruling out any changes to the scope of the Universal Service.
Royal Mail is honoured to deliver the UK's six-day-a-week, one-price-goes-anywhere Universal Service. Royal Mail is very proud to provide the Universal Service and of the role we play in the economy.
We make commerce happen by connecting companies, customers and communities across the UK.
The uniform, affordable tariff across the whole of the UK is protected by law.
The Postal Services Act 2011 (Section 31) obliges a postal service at affordable prices determined in accordance with a public tariff which is uniform throughout the United Kingdom. The Universal Service, including six-day-a-week collection and delivery, is enshrined in statute and can only be changed if voted for by both Houses of Parliament.
Nine out of ten customers consider Royal Mail a core part of the community - particularly in rural communities, where we are part of the lifeblood of day to day communication. We have an extensive network of over 115,000 postboxes across the UK, the highest level of provision per square kilometre of Western European nations."SMALL BUSINESSES
The services used by small businesses are protected by law. The Postal Services Act 2011 and the EU Postal Services Directive 1997 require universal postal service prices to be affordable. Ofcom found this month (April 2013) that Royal Mail's services were affordable to small and medium sized businesses.
The prices of Royal Mail franking services used by business have lagged behind inflation for many years and continue to do so. Franking customers benefit from good value prices and significant discounts, saving over 21 per cent on the price of a First Class letter and 34 per cent on the price of a Second Class letter.
Ofcom has set safeguard price caps on Second Class stamped mail, which also covers Second Class parcels up to 2kg.
