Ministers accused of spin over Royal Mail sell-off plans

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Ministers have been accused of spin over Royal Mail privatisation plans, after the Government insisted a sell off has only been "delayed" due to the economic crisis.

By Harry Wallop and James Kirkup
Published: 7:00AM BST 09 Jun 2009

Over the weekend, ministers hinted that the highly controversial plan to sell off a third of the Royal Mail to a private company, could be shelved in an attempt to win support from rebel MPs.

More than 140 Labour backbenchers have vowed to vote against the Government when the Postal Services Bill comes before the House of Commons.

Keen to avoid yet further discord within the Labour Party, Nick Brown, the chief whip and one of Gordon Brown's key allies, said he was "strongly in favour of a way through this issue that had a buy-in from a majority of the Labour and trade union movement".

Lord Mandelson, the key architect of the part-privatisation play, also indicated the bill could be delayed because the private companies bidding for a stake in Royal Mail were not offering enough. It is understood the Government wanted at least £2 billion for a 30 per cent stake, but private equity firms have not been able to raise the money.
However, the Government faced a fresh attack from backbenchers and union leaders on Monday, who warned that they would not accept a "delay" to privatisation; they want the entire project to be scrapped and Royal Mail kept in public ownership.

John Grogan, leading backbench opponent of the sell-off, said the rebellion will only be defused when the legislation allowing the sale is scrapped outright: "It would be nice to be able to trust Peter Mandelson, but I don't think the promise of a delay would be enough to avoid a showdown with the Labour backbenchers.
"If it's not practical to go ahead with the sale, we might as well revert to the position of full public ownership."

Neal Lawson, the chairman of the left-wing think tank Compass, said: "A delay is like putting a bullet in the revolver, putting it on the shelf, but saying you won't fire it.

"There are at least 80 Labour MPs who will oppose privatisation come what may. Delaying the bill does not get rid of this problem."

Billy Hayes, the general secretary of the Communication Workers Union, which gives about £1 million every year to the Labour party, said: "If the Government is foolish enough to go ahead with this plan we will ballot our members on whether we continue to finance the party at the next election."

A spokesman for the CWU added that the Royal Mail had demonstrated, with its latest annual financial results, it was profitable once again and that it was hitting all of its targets. "This isn't a failing company. It could delivery money to the Treasury, rather than be a burden to it."

The Department for Business has indicated that the Postal Services Bill will go ahead "as a package" and there is no room for rebels to take out the toxic part-privatisation sections.

A delay in a reading of the Bill to the autumn, however, would give opponents some time to negotiate.

[Big Daz]

Dear
The information you require, can be obtained by accessing the following weblink. http://www.berr.gov.uk/whatwedo/sectors ... index.html" onclick="window.open(this.href);return false;
I hope this is helpful.
Kind regards,
David
BIS Ministerial Correspondence and Enquiry Unit
020 7215 5000

________________________________________

Sent: 10 June 2009 11:37
To: Enquiry Enquiry (Enquiry Unit and Night Duty Office Mailboxes)
Subject: Update on Postal Services BIll
Due to a significant amount of media speculation about the postal services bill recently, please could you provide me the current official DBIS position on this important legalisation?


Many Thanks