Labour rebels step up opposition to privatisation of RM

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Labour rebels step up opposition to privatisation of Royal Mail after Commons defeats

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Labour rebels are stepping up opposition to plans for the part-privatisation of Royal Mail amid suggestions that Gordon Brown could suffer a third House of Commons defeat.

By Rosa Prince, Political Correspondent
Last Updated: 8:22PM BST 03 May 2009

Last week's surprise defeats over the Gurkhas and MPs' expenses have led to speculation among backbenchers that Labour whips may have lost control of discipline among the party.

The issue of Royal Mail has become one of the most toxic for the Government in recent months, with Lord Mandelson, the Business Secretary, facing fierce opposition to his plan to sell-off up to 30 per cent of the business to a foreign rival such as the Dutch firm TNT.

Sources denied reports that ministers had already decided that the vote, which had been expected early next month, would be delayed until the autumn to give the Government an opportunity to recover from current crises.

If the vote does go ahead as planned, the whips are said to have warned ministers to expect a significant rebellion by Labour MPs, leaving it forced to rely on the support of the Conservatives.

While the Tories have backed the scheme so far, some Government insiders fear that David Cameron, the party leader, could withdraw his support on a technicality, leading to the loss of the vote.

To date 180 MPs, the majority Labour, have signed up to a Commons motion demanding that Royal Mail remain in public ownership.
Government whips and business managers are due to embark on a charm offensive over the next few weeks, possibly including major concessions and compromises in order to get the measure through.

One proposal is said to include the prospect of a "John Lewis plan," where Royal Mail would be run as a partnership on the lines of the department store, with workers owning part of the company.

Pat McFadden, the Business Minister, insisted that the plans had enjoyed an easy passage through the House of Lords, and would arrive at the Commons on schedule.

He added: "The legislation has completed its committee stage in the Lords and is proceeding as planned."

A source added: "The door will remain open to any Labour MP who has concerns about Royal Mail. We are confident that we will be able to sooth the fears of some of those who have been very critical of the proposals to date."

Meanwhile, the Government is facing defeat in the House of Lords over plans to force retailers to keep cigarettes under the counter rather than on public display, amid fears for the impact on small shops.

Shop keepers complain that they can not afford the expense of removing cigarette displays, but Alan Johnson, the Health Secretary, is keen to push the proposals through as part of a further drive against smoking. The new rules would apply to large shops from 2011 and smaller retailers by 2013.

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DOWNING Street insisted last night it WILL press ahead with plans to sell off part of Royal Mail — despite warnings of a Commons defeat.
Gordon Brown was rocked by last week’s loss over the Gurkhas’ right to live here and also had to retreat on MPs’ expenses.

Labour rebels are now warning that the PM will suffer another bruising setback when the Commons votes on his Royal Mail plans next month.

The vote will come after the June 4 European and local elections, with Labour braced for heavy losses.

More than 150 Labour MPs have already signed a motion opposing plans to sell off nearly a third of Royal Mail.

Mr Brown faces the embarrassing prospect of relying on Tory votes to get his plans through.

But a spokesman for Mr Brown yesterday insisted that there would be no U-turn.

He said: “This is an important reform and we are going ahead with it.”

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Campaigners call for Royal Mail U-turn amid claims PM ‘climbing down'

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Campaigners against the controversial plans to part-privatise Royal Mail urged the government to review proposals as it was reported that Gordon Brown was preparing a climbdown over the issue.

Just last week there were defeats over the Gurkhas and MPs' expenses and it is now believed the scheme to sell off part of the postal service could be defeated if put to the vote.

Sources say the plan may have worked a month ago, but with growing opposition it is thought the government do not want to be left in the position of relying on Tory support.

Around 150 Labour MPs have signed a Commons motion against the plans to sell up to 30% of Royal Mail to a foreign rival, such as Dutch-owned TNT.

It was expected to go to a vote after next month's European elections, but it is likely a full debate would not be held until after the party conferences in October.

Ian Davidson, Labour MP for Glasgow South West, said: "During the past week members of the Scottish group of MPs, met with both Gordon Brown and Peter Mandelson and the lack of support for the part-privatisation has been made clear.

"The opposition to privatisation has been strengthened by a recent report that the money received as a result of a sell-off is understood to be much diminished because of the current financial climate."

Compass, a leading left-wing pressure group, said a financial analysis it has carried out on the likely revenues of a partial sale of the business will see the Treasury net less than half the value it would have secured a year ago.

Business Secretary Lord Mandelson said the government was aiming to complete the part privatisation of Royal Mail "later this year or early in 2010". Potential bidders for the "strategic partnership" had been sought since January. Shortlisted companies had this month been invited to present a detailed bid, with "firm offers sought by early June" and "with a view to negotiating an initial agreement on the partnership by the summer."

Bill Hayes, general secretary of the Communication Workers' Union, welcomed the speculation there could be a climbdown.

He said: "There is a clear back-bench rebellion which the government needs to listen to on keeping a public Royal Mail.

"It is important the government doesn't walk away from the issue because the company does need public investment for a successful future in the public sector."

This week a giant postbox is to be transported across the country as part of a fresh campaign aimed at overturning the sell-off plans.

The Communication Workers' Union will take the 20ft high inflatable red pillar box, and a 7ft-long postcard, on a tour of towns, cities and beauty spots, starting at John O'Groats tomorrow. It will later travel to Inverness, Perth, Dundee, Glasgow, Edinburgh and Kirkcaldy.

The box is due to arrive in Glasgow's Buchanan Street on Thursday before travelling on to the Summerlee Heritage Centre, in Coatbridge.

Mr Hayes added: "Royal Mail is an iconic British service epitomised by the public's affection for post offices, post boxes and holiday postcards.

"Postal workers are at the heart of communities the length and breadth of the country, ensuring we all receive our mail six days a week.

"This service is not profitable in rural locations or for the majority of social mail. But this is a public service and public services are worth more than balance sheets."