Union chief claims Leighton's Royal Mail plans are doomed

Alan Johnson, the Secretary of State for Trade and Industry, has pledged to reject plans to part-privatise the Royal Mail.

Alan Johnson, the Secretary of State for Trade and Industry, has pledged to reject plans to part-privatise the Royal Mail.

The claim is made by Billy Hayes, the general secretary of the Communication Workers Union (CWU), who met Mr Johnson on Tuesday.

The news comes after weeks of speculation that Mr Johnson was warming to Royal Mail proposals to turn the state-owned business into a John Lewis-style partnership.

But Mr Hayes said: "Alan Johnson said that the Government would stick to the manifesto commitment and keep Royal Mail in the public sector. He said that he had no plans to renege on that."

Allan Leighton, chairman of Royal Mail, wants to part-privatise it, by buying 51 per cent of the company from the Government, and hand shares to the workers.

He would pay for this by borrowing £2bn against the security of assets owned by the company. Mr Leighton also wants to shift £1.5bn of its £2.5bn-worth of pension liabilities on to the Government's balance sheet.

Mr Leighton has discussed the ideas widely in the press, but has yet to present them to Mr Johnson, a former postman and past general secretary of the CWU.

A DTI spokeswoman said that Mr Johnson was attempting to fix a date to meet the Royal Mail chairman. "He has not seen any firm proposals yet," she said.

The Labour Party manifesto said: "We have given Royal Mail greater commercial freedom and have no plans to privatise it. Our ambition is to see a publicly owned Royal Mail fully restored to good health."

By proposing the part-privatisation, Mr Hayes claims that Mr Leighton is "trying to undermine British democracy". He said: "The ink is hardly dry on the manifesto.

"Our members will not allow the idea of selling the equity. No one is going to convince our union that this is not privatisation, no matter how you dress it up."

Earlier this month, Royal Mail announced an operating profit of £537m. But the company has warned that it needs to invest £2bn in its business over the next three to five years.