Leading article: Mandelson's counter-productive tone

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There was always a worry in Labour circles that the Prime Minister's rehabilitation of Peter Mandelson might have "consequences", and that any value the party gained from his brilliant mind might be outweighed by his divisive qualities. Those fears will have been reinforced by the Business Secretary's acerbic attacks at the weekend on opponents of his plans to part-privatise the Royal Mail, during which he accused the unions of resorting to "scare tactics".

The debate on the Royal Mail is now in danger of becoming so polarised between pros and antis that any possible advantages deriving from the sale of 30 per cent of the Post Office will be lost in the heat of battle. The Bill has thus turned into a litmus test of government authority.

To dismiss all opponents of the sale as Luddites, and to maintain that there is no alternative to privatisation, strikes an anachronistic, Thatcherite tone. It sounds especially odd when the axiom that "markets know best" has never looked so weak.

At the same time, Lord Mandelson's insistence that the Royal Mail cannot carry on as it is now is incontrovertible. Its pension plan is hugely indebted, to the tune of £9bn, its service is less efficient those that of its European counterparts, while its traditional core activity, the delivery of letters six days a week, is constantly undermined by the growing level of communication by email.

With the support of Gordon Brown, the Business Secretary insists the sale of less than a third of the Royal Mail is not a first stage towards full privatisation, and that a combination of a substantial cash injection from a foreign buyer, alongside an assumption of responsibility on the Government's part for the pension deficit, is the right way to rescue a failing industry.

Beyond accusing the Government of concealing its real agenda, unions and other opponents have yet to come up with a convincing alternative to what Lord Mandelson proposes.

But with its communications with unions and backbench MPs in disarray, it may be too late for the Government to avoid a mini-civil war over the future of Royal Mail. That would be a pity, as it would only mark the victory of ideological rancour over common sense.

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