Backing sought for mail sell-off

THE PUBLIC is to be consulted before the Government goes ahead with its controversial plans to privatise most of the Royal Mail and Parcelforce, Michael Heseltine, the President of the Board of Trade, revealed yesterday.

The decision to publish a Green Paper was approved at a Cabinet committee meeting yesterday before the full meeting of the Cabinet to overcome public and Tory backbench unrest about the plans.

But senior Cabinet sources said the plans partially to privatise the Royal Mail and Parcelforce were still on track for late 1995. Legislation could be introduced in

November.

Mr Heseltine told the Commons that the Queen had given her approval for her head to remain on the postage stamps after the service became Royal Mail plc.

The announcement provoked unease among Tory backbenchers, in spite of assurances by Mr Heseltine about the future of rural post offices.

It is understood that Mr Heseltine wanted full privatisation of the Royal Mail. He was strongly supported by the Treasury. Michael Portillo, the Chief Secretary to the Treasury, who was on the front bench for the statement, backed him in Cabinet.

But it was opposed by Douglas Hurd, the Foreign Secretary, and Lord Wakeham, Leader of the Lords, who chairs several key Cabinet committees. Partial privatisation, in which the Government would retain a 'a substantial minority shareholding' - expected to be 49 per cent - was a compromise to secure Cabinet support.

Lord Hailsham, the former Lord Chancellor, gave a warning of possible difficulties ahead in the Lords. He said the Conservative Party 'was not altogether united' on the privatisation plans.

Tory criticism in the Commons was muted, and ministers believe Mr Heseltine has done enought to avoid a full-scale rebellion.

Mr Heseltine, who told MPs the 'status quo is not an option', decided about six weeks ago that a Green Paper would be needed to answer the criticism and 'kill the myths' about the plans, which have been under review for 18 months. The announcement was speeded up following a leak in the Independent.

Last night the President of the Board of Trade wrote to Tory MPs underlining his reassurances that the universal service to every address in the country would be maintained with a uniform tariff structure and a nationwide network of post offices.

His Commons statement was a bravura performance, which Tory MPs saw as further evidence of his fitness for the Tory leadership race. Tory MPs also pointed out that he was working closely with Mr Portillo, who has the support of the Thatcherite right.

Robin Cook, Labour spokesman on trade and industry, warned that Labour would mount a campaign in the country against the privatisation of the mail services, although he supported commercialisation of the Royal Mail under public ownership. That approach was endorsed by the Union of Communication Workers.