PLANS to increase the cost of posting letters to record new levels have been condemned by business leaders, consumer groups and politicians in Scotland.

Royal Mail announced yesterday that the cost of first class and second class stamps is to go up by 14p to 60p and 50p.

The postal group warned the universal service obligation, under which post is delivered to any house in the UK for the same price, was in "peril" without higher stamp prices.

Prices will rise from the current 46p for first class and 36p for second class from April 30, while the cost of posting large letters will increase from 75p to 90p for first class and 58p to 69p for second class.

However, the move has been criticised for passing costs on to businesses, who rely on the service, and those who still send letters.

Scottish policy convener of the Federation of Small Businesses, Andy Willox, said: "From sending invoices to payslips, small businesses are still reliant on postal services, even in this increasingly digital age. Indeed, for many, the Royal Mail is the only show in town.

"We understand the importance of maintaining a universal postal service. But, at a time when overheads are rising across the board, this sudden, sharp rise will just make things that bit harder."

Trisha McAuley, deputy director at Consumer Focus Scotland, added: "This is not great news for consumers. I doubt anyone is going to think about the challenges facing Royal Mail when they are paying 60p for a first class stamp.

"This is a very significant increase in the price of an essential service and those consumers who continue to use it will look much harder at the value for money and quality of service that they get."

SNP Postal Affairs spokesman Mike Weir MP branded the increases "ludicrous", saying: "The result of this inflation-busting hike will price small businesses out of the first class market."

The increases followed a decision by regulator Ofcom to give Royal Mail the freedom to set its own prices in the face of dwindling revenues.

During the last four years, Royal Mail has made a loss across its core mails business of almost £1 billion.

It said there had been a "significant deterioration" in its finances, blaming artificially low prices, falling volumes and less mail being delivered to an increasing number of addresses – up from 27 million to 29 million since 2003.

Mail volumes fell by 25% in six years and are expected to decline by around 5% a year for the foreseeable future.

Chief executive Moya Greene said: "This is a very high-quality, cherished service, but it needs to be paid for. The increase will restore our finances and maintain the universal service.

"We had no alternative but to increase prices."

"We know how hard it is for households and businesses when our economy is as tough as it is now. No-one likes to raise prices in the current economic climate but we have no option.

"Royal Mail provides one of the highest quality postal services in Europe for among the lowest prices for both consumers and business.

"That service is under threat from declining volume, e-substitution and ever-increasing competition."

She added standards in the UK are "appreciably higher" than in many other EU countries, with deliveries over six days against an EU obligation of five days, and a next-day target of 93%, the highest for any major European country.

The Government is pressing ahead with privatising the Royal Mail in the face of continued opposition from unions.