The Forum of Private Business (FPB) has warned that, under the new system, postal chiefs at Royal Mail will be free to increase the cost of a first class stamp without limit, but with caps in place for second class letters and parcels for at least the next seven years.
Ofcom says that charges for second class post will be indexed linked to inflation with a ceiling for second class stamps of 55p until 2020.
Small business.co.uk reports that the FPB believes this will almost inevitably lead to first class charges becoming unaffordable for many small companies, forcing reliance instead on the far slower second class system.
Under the new model 93 per cent of first class mail would be expected to arrive the next day, and 98.5 per cent of second within three days.
FPB chief executive Phil Orford says, ‘We think these changes are bad for business, and will ultimately cost small firms – the bread and butter users of the postal service – far more to send items via first and to a lesser extent second class in the years ahead.
‘If Ofcom thinks it can give Royal Mail these new freedoms and prices won’t immediately go up, it is deluded. This will merely prove to be yet another increase in the cost of doing business for small companies.’