Downing Street rejects Royal Mail compromise
By Ian Dunt
The potential for a backbench revolt of plans to privatise Royal Mail became markedly more likely this morning when a Number 10 spokesman ruled out a compromise solution.
Left-wing thinktank Compass proposed an alternative to the government plans, which would see the Royal Mail turned into a not-for-profit company, along the lines of Network Rail.
Undertaking the scheme would have allowed the government to sidestep a backbench revolt by disgruntled Labour MPs, which would be considered a political disaster after Gordon Brown received his first Commons defeat as prime minister over Gurkha residency last week.
A spokesman for Number 10 described the plan as “unworkable”.
The prime minister’s spokesman did nothing to undo that assumption, saying the government remained opened to alternatives, but “we haven’t seen them so far”.
He added: “We are determined to save the Royal Mail… and protect the universal service obligation of the Royal Mail.”
His comments were quickly followed by comments from John Grogan, one of the ringleaders of the Labour backbench rebellion, on BBC Radio 4’s The World at One programme.
“I think it would be a kamikaze move quite frankly on behalf of ministers to bring it back then,” he said.
“The government has had a rough few weeks, we’re approaching elections. A deal has got to be done between ministers and backbenchers.”
Dozens of MPs have said they will vote against the government measures, formulated by business secretary Peter Mandelson.
The latest comments follow a weekend of damage limitation exercises by Labour, with every potential leadership challenger publicly professing loyalty to Mr Brown.
Health secretary Alan Johnson and deputy Labour leader Harriet Harman both said they would not stand against Mr Brown, while communities secretary Hazel Blears quickly put out a statement clarifying a seemingly critical a piece she had written for the Observer.
“Any suggestion that I intended what I wrote as criticism of him [Mr Brown] or his leadership is completely wrong. I fully support the collective decisions we take,” she said.
This morning the prime minister’s spokesman said Mr Brown is satisfied he has the support of Cabinet.
So far 148 Labour MPs have signed a motion opposing Downing Street’s Royal Mail plan, indicating the government could be forced to rely on Tory support to pass the reform.
“The alternatives of defeat at the hands of Labour backbenchers, or privatisation, but only with the help of [the] Tory frontbench, are both too awful to contemplate,” said the author of the Compass pamphlet, Neal Lawson.
A Downing Street statement said: “The government has said its door is open to those with ideas on the future of the Royal Mail and Neal Lawson has taken advantage of the opportunity to present the proposal he is publishing this week to government officials.
“We do not believe his alternative is workable and it is not under consideration.”
Government plans would see Royal Mail part-privatised, with Dutch firm TNT taking on a minority stake.”
