Mandelson confirms Royal Mail privatisation has been shelved
Business secretary blames 'market conditions' for failure to press ahead with controversial legislation
- guardian.co.uk, Wednesday 1 July 2009 17.44 BST
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Photograph: Shaun Curry/AFP/Getty Images
Gordon Brown and Lord Mandelson today confirmed that the bill for the part-privatisation of the Royal Mail has been shelved.
Mandelson, the business secretary, told peers that current "market conditions" would not allow a partial sale of the Royal Mail that would ensure value for money for the taxpayer.
He told the Lords: "Market conditions have made it impossible to conclude the process to identify a partner for the Royal Mail on terms we can be confident would secure value for the taxpayer.
"There is no prospect in current circumstances of achieving the objectives of the postal services bill. When market conditions change we will return to the issue."
In an interview with Sky News, Brown said that the government had "looked around the marketplace" and concluded that there were no buyers or investors willing to take a stake in the Royal Mail.
At one stage ministers were planning to press ahead with passing the postal services bill, while putting of the decision to sell a minority stake in the Royal Mail – which the bill would allow – until a later date.
But today Downing Street confirmed that the bill and the sell-off were both being delayed. "We want to legislate when we are in a position to implement," the prime minister's spokesman said.
More than 100 Labour MPs signed a motion opposing the plan and Brown had been told that he would only get the bill through the Commons with Tory support.
In the Lords, Mandelson said the government remained "convinced" that the proposals set out by Richard Hooper's report into the Royal Mail offered "the best chance for securing the universal postal service while protecting Royal Mail pensions".
Mandelson added: "We have thoroughly tested the market to see who is interested in partnership, but economic circumstances, I need hardly point out, are extremely difficult.
"I have always been clear that we would only do a deal with the private sector if it represented value for money for the taxpayer. Our market testing has shown now is not the time to sell a minority stake in Royal Mail."
The postal services bill has been approved by the Lords but was expected to face stiff opposition in the Commons from Labour backbenchers opposed to a plan that would allow a private partner to hold a minority stake in Royal Mail.
Lord Hunt of Wirral, for the Conservatives, said at question time that it was "sad" that the announcement had been made first in the media.
He told Mandelson: "By shoving this critical postal services bill into cold storage to suit their short-term political ends, despite the Conservative party still standing ready to help to see it onto the statute book, do you not realise that you and your colleagues are putting the trustees of the Royal Mail pension plan in an impossible position, given the revaluation that took place on 31 March last?
"What do you intend to do to restore confidence and certainty to everyone involved in the Royal Mail and its pension plan?"
Mandelson replied: "I can assure you this house is the first to know. Whatever spin may be put on remarks made in an interview is a matter for the newspaper concerned.
"Can I take this opportunity to say that the time spent on the postal services bill in this house has strengthened and improved the bill. I thank noble Lords for their contributions which have helped to achieve this."
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