Minister moves to allay UK Royal Mail sell-off fears

A minister has moved to allay Labour MPs’ fears that the government might stage a back-door privatisation of Royal Mail, telling them it will not renege on a manifesto pledge to keep the postal operator in public hands.

Opposition to any change in ownership has grown. Nick Brown, a former cabinet minister and an ex-party whip, added his name to a Commons motion on the issue yesterday, taking the number of Labour signatories to 185, more than half the parliamentary party.

In a briefing note to backbenchers Alan Johnson, trade and industry secretary, moved to ease their concerns, saying the government, the sole shareholder, had an open mind on a proposal to set up a share trust for Royal Mail workers “as long as it would be compatible with our manifesto commitments”.

Mr Johnson’s note argued that an employee share scheme, an idea that is opposed by the Communication Workers Union, was “one option . . . which could help give workers a stake in the company that they worked for”.

He added: “We are not committed to this scheme, and there are other alternative ways to increase employee involvement.”

The minister reinforced a perception that he saw some merit in Royal Mail’s proposals for a share trust, saying: “Such a scheme is worth looking at in a context where shares are held in trust for the workers, and so cannot be sold on to the open market.

“A trust held in this way would continue in perpetuity without unravelling into privatisation.”

However, with ministers, the regulator and thecompany still wrangling over its financial difficulties, any decision on the em-ployee share plan is not expected before January when the postal services market is due to open up to full competition and new pricing controls will be in place.

The postal operator warned this week that it could be forced into bankruptcy by its spiralling Pounds 4.25bn pensions deficit, and it is lobbying for an investment of at least Pounds 2bn from the government.

Billy Hayes, CWU leader, said that the union would continue to campaign against what it argued was, in effect, privatisation.

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