The British government wants to delay the controversial part-privatisation of Royal Mail followingan unsuccessful bidding round and to avoid a rebellion within the ruling Labour Party, according to
media reports.The business secretary, Lord Mandelson, told the Financial Times that the Postal ServicesBill could be delayed for various reasons until after the next election, which has to be held bynext June at the latest. These included a lack of time in the parliamentary timetable, the state ofthe economy and the sale process.
Up to 140 Labour MPs are committed to opposing the Postal Services Bill. However, it wouldget through Parliament since the opposition Conservatives and Liberal Democrats would support it.
“I want to do this before the next election but we do have the problem of the economy,” LordMandelson told Sky News. He added: “The timing is going to be affected inevitably by the state ofthe markets and our ability to recruit a strategic minority partner.”
But Lord Mandelson emphasised he would keep to the conclusions of the Hooper Review, whichrecommended selling a minority stake to a strategic partner, restructure the massive pensionsdeficit and reform postal regulation in Britain. “We will not do one of these without the others,”he declared.
The Times reported that as an alternative ministers are looking into a direct injection ofgovernment capital into Royal Mail through a bond issue or a debt structuring, which would avoidhaving to sell the 30% stake at a lower price.
According to British media, the bidding round attracted only one offer from private equitycompany CVC whose bid was reportedly less than the £2 billion sought by the government. TNT decidednot to make a bid. The postal services minister Pat McFadden admitted: “It’s not the best time todo a commercial transaction.”
In response to Lord Mandelson’s comments, the postal union CWU welcomed the delay to thePostal Services Bill and called for a “fresh start for Royal Mail in public ownership”. BillyHayes, CWU General Secretary, said: “We welcome the postponement of the Bill because it creates anopportunity to modernise Royal Mail as a public service. The government must now consideralternative legislation by the autumn, to allow for a new form of regulation of the industry, andthe removal of the pensions deficit.” Dave Ward, CWU Deputy General Secretary (Postal), added: “TheCWU has offered management a three month moratorium on industrial and executive action in order toachieve a modernisation agreement. With the government’s new position, management must take thisopportunity to respond positively to the workforce’s concerns.”
