TUC Conference: Government: Mandelson under fire on bonuses

PETER MANDELSON will today come under pressure on a series of controversial issues including Post Office privatisation and "fat cat" salaries at the Millennium Dome.

Mr Mandelson, Secretary of State for Trade and Industry, will be urged by delegates at the congress to clarify government plans for private- sector involvement in the Post Office.

And the conference will expect him to justify pounds 400,000 bonuses to senior executives at the Millennium Dome revealed in The Independent yesterday.

Mr Mandelson, who once worked for the TUC but left under a cloud, addresses the conference in the wake of overwhelming votes yesterday which were strongly critical of government policy towards public-sector pay and services.

The 800 delegates also registered their opposition to the Private Finance Initiative which seeks to involve private money in state projects. The TUC further registered disapproval of the possible sell-off of air traffic control and the Royal Mint together with the semi-privatisation of London Underground.

In anticipation of a cool response, the minister, regarded as one of the union movement's principal enemies in the Cabinet, will arrive on the platform with Mo Mowlam, Secretary of State for Northern Ireland, who is guaranteed a rapturous reception.

Ministers yesterday made clear that there would be no wholesale sell- off of the Post Office, but union leaders will demand to know whether the Government intends to sell 49 per cent of shares in the organisation or keep it under total state ownership, with more commercial freedom.

It is understood that there is a cabinet rift over the organisation, with Mr Mandelson favouring the sell-off of some shares and other ministers insisting that it remain under government ownership. The completion of a review has been postponed several times.

Derek Hodgson, leader of the Communication Workers' Union, pointed to a pre-election promise from Tony Blair that the organisation would not be privatised. "We in the CWU worked hard with the Labour Party to ensure that a change of government came about. And we expect previous promises to be kept," he said.

Mr Mandelson faces further embarrassment after leaders of the TGWU and Unison, Britain's two biggest unions, seized on revelations in The Independent that three directors of the Millennium Dome were to receive huge bonuses.

Alison Shepherd, president of Unison, said: "It is just one more example of fat cats getting even fatter on a public project while the poor, low- paid public-sector workers are told they can't have a decent increase."

Bill Morris, TGWU general secretary, said: "All workers should be treated equally."