Public opposes part-privatisation of Royal Mail

8 Jun 09
The government’s controversial legislation to part-privatise the Royal Mail is set to be debated by MPs against a backdrop of strong public opposition

22 May 2009

By Tash Shifrin

The government’s controversial legislation to part-privatise the Royal Mail is set to be debated by MPs against a backdrop of strong public opposition.

The Postal Services Bill was expected to complete its passage through the House of Lords after its third reading on May 20, with Conservative peers supporting the government. It will then move to the Commons, where backbench Labour MPs are already preparing a rebellion.

An ICM public opinion poll, commissioned by the Communications Workers Union, revealed widespread opposition to the plan to sell a 30% stake in the Royal Mail – 75% opposed the sale and just 17% supported it.

Only 15% thought the government would get a good deal for the taxpayer from part-privatisation, and 82% feared a sell-off would lead to postage price rises.

CWU general secretary Billy Hayes said: ‘Royal Mail needs to be modernised, not privatised. The public have got it right. The business needs to be reformed within the public sector, giving it the freedom to invest but keeping it as a public service. It makes organisational, financial and now, clearly, political sense.’

A Conservative spokesman said the party would maintain its backing for the Bill but still had questions about the proposals, particularly the plan for the government to take on the multibillion-pound deficit of the Royal Mail pension scheme. Speaking ahead of the Lords debate, he told Public Finance: ‘Taking it on to the public books in its unfunded state is not the best way. But it’s not a deal-breaker.’

Earlier this month, Royal Mail group reported operating profits of £321m for 2008/09, almost double the £162m made the previous year. The letters business, which would be subject to the part-privatisation if the Bill became law, chalked up a £58m profit, compared with a £3m loss the previous year, despite a 5.5% fall in mail volumes.

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