Mandelson tries to win over Mail sell-off rebels

Business Secretary pledges public sector will maintain control of post office network

(PA)

Lord Mandelson will set out a series of concessions to opponents of the part-privatisation of Royal Mail today in an effort to head off the biggest backbench rebellion of Gordon Brown's premiership.

More than 130 Labour MPs have condemned the proposals and several cabinet colleagues, including Harriet Harman, the deputy Labour leader, have urged the Business Secretary to abandon the move.

But he will press ahead with the scheme, publishing detailed proposals today to sell a minority stake of about one-third of the business to a foreign buyer. He will seek to win over some Labour rebels by writing into the legislation a commitment to deliveries six days a week to every address in Britain.

The Postal Services Bill will promise that the public sector will retain a majority control of Royal Mail and complete control of Britain's post office network. It will allow Royal Mail to charge higher fees to private delivery firms with which it co-operates.

Ministers hope the concessions will counter accusations that the part-privatisation is a stepping-stone to a complete sale. They also want to reassure Labour MPs that post offices will not be affected by the move.

But a ministerial source said: "We are adamant that the Bill must proceed. We can't duck the issue of resolving Royal Mail's future."

Ms Harman had been calling for the sale to be delayed until after the local elections in June because of evidence of opposition among voters. She is thought to have won the backing of the Chief Whip Nick Brown, who would face a daunting task in limiting the scale of the Labour revolt, and the Health Secretary Alan Johnson, the former head of the postal workers' union. Five ministerial aides are among 132 Labour MPs who have signed a motion opposing the proposed sale. They will not be sacked from their position as parliamentary private secretaries.

Ministers argue they have to raise private capital to help resuscitate the business, which also faces a deficit of up to £8bn in its pension fund. The Government will take responsibility for the fund as part of the reforms.

Labour critics warn that the moves could lead to thousands of job losses and a deterioration of services. Lindsay Hoyle, the Chorley MP, said: "It is a suicidal decision by ministers to pursue this. They should reflect on what's being proposed here – I bet there are a lot of sleepless nights over this."

A poll for the PoliticsHome.com website yesterday found the public opposes the proposals by a margin of 65 per cent to 24 per cent.

Lord Mandelson formally introduced the Bill in the Lords yesterday, although it will be published today.

Billy Hayes, general secretary of the Communication Workers Union, said: "It is outrageous that Peter Mandelson can put this legislation to an unelected House at a time of his choosing. He might be immune from the voting public, but his Government is not."