MP quits government over Royal Mail plans

Wednesday, 17 December 2008 5:54 PM

Junior minister Jim McGovern has announced his resignation over government plans to sell off a significant part of Royal Mail.

The move could spell the beginning of a backbench Labour revolt over the plans, which some are describing as the firsat step towards privatisation.

Mr McGovern was parliamentary private secretary to employment relations minister Pat McFadden in the Department for Business, Enterprise and Regulatory Reform prior to his decision to quit.

The Dundee West MP said he could not support the government's decision to find a commercial solution for Royal Mail's financial difficulties in a statement on his website.

"For me it simply beggars belief that we would employ the services of a company from abroad to tell the Royal Mail in this country where they are going wrong," Mr McGovern said.

Business secretary Lord Mandelson told the Lords yesterday that Dutch postal firm TNT is already being considered as a candidate to take up to 30 per cent of Royal Mail.

"While I have enjoyed my period [as] a parliamentary private secretary and I regret having to resign, I simply feel that under the circumstance there was no alternative," Mr McGovern added.

The government's decision to back a strategic partnership with one or more private sector partners followed the recommendations of an independent review of the Royal Mail by ex-Ofcom deputy chairman Richard Hooper.

Shadow business secretary Alan Duncan said: "This resignation shows that no-one is falling for Peter Mandelson's spin that selling off part of Royal Mail does not count as part-privatisation.

"The Hooper Review confirmed that we are in danger of losing the universal postal service unless there is urgent reform, but the minister in charge of post offices can't even get his own staff to agree with his policies."

Mr Hooper also called for the pressure exerted on the Royal Mail by its pension deficit to be eased and said Ofcom should replace Postcomm as its regulator.

SNP Westminster postal affairs spokesperson Mike Weir said: "Labour are deeply split and in serious trouble over their mishandling of our Post Offices, and disastrous part-privatisation plans. This is the latest mess for the country and the Labour Party created by Peter Mandelson - it will not be the last."

The issue remains intensly hot, and officials are trying to put off any concerted action for as long as possible.

Lord Mandelson will issue a "full statement of policy" in the new year.

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