12 February 2009 - Steve Lawson - © Hellmail Postal News

The government says it has no intention of making a u-turn on the partial privatisation of the Royal Mail. Both main opposition parties also back plans, in principle, for a strategic partnership which will see 30% of Royal Mail sold to an outside investor such as Dutch-owned TNT.

Despite a backbench rebellion by a growing number of Labour MPs, and a recent poll which suggests that the public are not in favour of the idea of a strategic partnership, the government is determined that the plan, gleaned from a comprehensive report by Richard Hooper, will go though. It is thought that the government may still gain enough votes from opposition MPs who have so far failed to be convinced by those firmly against the plan.

Insiders say that concessions such as measures to help strengthen the post office network could sweeten dissenters and swing the vote in favour of Lord Mandelson who is keen to see an investor brought in as soon as possible. The government has so far made no comment concerning threats by the Communication Workers Union to ballot on the cessation of Labour party funding. The government said that there was no choice but to bring in expertise from an operator with experience of turning round a struggling postal operation. It said its commitment to the Universal Service Obligation, and Royal Mail's strength in Europe would be bolstered by a minority stakeholder.

The government highlighted the strength of other operators with mechanised operations and a trend in Europe of consolidation mail services. It also said that despite pressure on Royal Mail to modernise swiftly, it had failed to do so.

Rebel MPs drew attention to the cost of similar postal services elsewhere in Europe, saying that the cost of sending a first classs letter was almost double that of the UK and that part-privatisation would see prices skyrocket. They also highlighted the unlevel playing field where the UK was fully liberalised but where other countries were holding back.

Conservatives still had questions about the content of the plan which has so far not been fully revealed, as well as the security of £22bn assets belonging the Royal MJail pension fund but was otherwise unopposed to government plans and the recommendations of the Hooper report.

Sian Jones. press officer for the Communication Workers Union told us today that there was:

"No convincing case for part-privatisation being put forward"

"There is a case for investment, yes, but not rest. The government’s amendment to the opposition motion yesterday did not use the word privatisation – or any of their pseudonyms like 'strategic partner' etc – which we think is significant.

"Our opinion poll results show that the public are not in favour of it. The Early Day Motion opposing privatisation has over 130 MP signatures and an e-petition on the No 10 website has over 4,500 names."

Receive our daily headlines free each morning - opt in or out with one click.

Information on advertising opportunities can be found here