Royal Mail has dismissed suggestions that first class postage stamps will rise to £1 by 2015, guardian.co.uk reports.

In spring last year, Royal Mail controversially applied its biggest price increases for 37 years – a hike of 30 per cent which brought first class stamps from 46p to 60p each.

The Save Our Royal Mail group believes that a repeated rise plus VAT could see first class stamp prices more than double that of early 2012.

According to the campaigners, the increases could come about if other mail operators challenge Royal Mail’s current VAT-free status. If successful, the addition of 20 per cent VAT will take the price of a first class stamp to 72p. If it was then to raise prices by 30 per cent, stamps would cost 94p.

Royal Mail has disregarded the claims and spokesperson, Mish Tullar 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.”

The campaigners are equally concerned that should Royal Mail be privatised, it will lose its VAT exemption under European Law, aol.co.uk writes. However, Royal Mail has countered this by asserting that similar privately-owner firms in Europe retained a VAT exemption, thus it would still apply in the UK.

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