Royal Mail part-privatisation on track after vote in Lords

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Rebel Labour peers have failed in their bid to derail Lord Mandelson's plans to part-privatise the Royal Mail.

By Harry Wallop, Consumer Affairs Editor
Last Updated: 10:37AM BST 12 May 2009

The defeat of the rebels will come as a welcome relief to the Government, which was defeated last month over the right of Gurkhas to live in Britain.

Labour and Tory peers combined to dismiss an amendment tabled by Lord Clarke of Hampstead, a former postal union leader, who had attempted to kill off the Bill by declining to give it a second reading. The amendment was defeated 228 votes to 25, a Government majority of 203.

The Bill, introduced by Lord Mandelson, the Business Secretary, allows for up to 49 per cent of Royal Mail to be sold to a company, but also bails out the pension fund and strengthens protection from private competition.

In the debate ,Lord Mandelson robustly defended his plans, saying that email was slowly but decisively damaging the Royal Mail's postal business.

"Our postal service is too important for me to accept the advice from one ardent critic of the Bill to 'leave well alone' and to manage decline. Our postal service and the public demand better than that. We can't turn the clock back."

He added: "Our goal is to put a publicly-owned Royal Mail on a clear and swift path to modernisation and, in so doing, to secure the future of the universal postal service."

The Bill is expected to complete its Lords stages later this month and to begin what promises to be a stormy passage through the Commons soon after the local and European elections on June 4.

To date 180 MPs, the majority Labour, have signed up to a Commons motion demanding that Royal Mail remain in public ownership.