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'No political fix' on Royal Mail 'No political fix' on Royal Mail
(40 minutes later)
A compromise deal suggested as a way to avoid a damaging Labour revolt on Royal Mail is not being considered, Post Office minister Pat McFadden said.A compromise deal suggested as a way to avoid a damaging Labour revolt on Royal Mail is not being considered, Post Office minister Pat McFadden said.
He said proposals to turn it into a not-for-profit company like Network Rail "underestimated" its challenges. He said proposals to turn it into a not-for-profit company like Network Rail were just a "political fix".
That would just be a "political fix" rather than a comprehensive plan to transform Royal Mail, he said. The government's plan to sell off a 30% stake in Royal Mail remained the "most convincing" option, he said.
The government's plan is opposed by 148 Labour MPs and they might have to rely on Tory MPs in the vote due next month. But Labour backbencher John Grogan said ministers would have to compromise to win over more than 100 Labour rebels.
Post Office minister Mr McFadden told BBC Radio 4's Today programme the government's plan to sell off 30% of Royal Mail was the "most convincing plan that has been put forward so far". The government's plan is opposed by 148 Labour MPs - many of whom may rebel in the vote, which could take place next month, raising the prospect of the government having to rely on Conservative votes to get its measure through.
'Difficult' choice'Difficult' choice
Post Office minister Mr McFadden told BBC Radio 4's Today programme the government's plan to sell off a stake in Royal Mail was the "most convincing plan that has been put forward so far".
He said the not-for-profit proposal - put forward by the left wing campaign group Compass - was "driven by the politics of finding a solution around a political fix, rather than the transformation that's needed".He said the not-for-profit proposal - put forward by the left wing campaign group Compass - was "driven by the politics of finding a solution around a political fix, rather than the transformation that's needed".
The proposal "underestimates the challenges faced by Royal Mail" - such as the rapidly declining volume of letters posted, he said.
I would say to Gordon Brown and his government: 'Don't go faint hearted on this. Do what's right, the Conservatives will support you' David CameronI would say to Gordon Brown and his government: 'Don't go faint hearted on this. Do what's right, the Conservatives will support you' David Cameron
The proposal "underestimates the challenges faced by Royal Mail" - such as the rapidly declining volume of letters posted, he said.
Mr McFadden said he was happy to talk through other ideas but the government's plan, which followed a 12-month review, offered a "comprehensive" solution to transform Royal Mail and deal with its pension deficit.Mr McFadden said he was happy to talk through other ideas but the government's plan, which followed a 12-month review, offered a "comprehensive" solution to transform Royal Mail and deal with its pension deficit.
"I understand this is difficult for some colleagues. We did not set out to pick a fight with backbenchers or trade unions, but we have a responsibility," he said."I understand this is difficult for some colleagues. We did not set out to pick a fight with backbenchers or trade unions, but we have a responsibility," he said.
"Simply to kick it into the long grass would not be a responsible thing to do.""Simply to kick it into the long grass would not be a responsible thing to do."
'Lamentable failure' 'Kamikaze move'
The government argues that Royal Mail's multi-billion pound pension deficit and the increasing popularity of e-mail means it cannot survive in its current form and needs outside investment.The government argues that Royal Mail's multi-billion pound pension deficit and the increasing popularity of e-mail means it cannot survive in its current form and needs outside investment.
But its critics, including the Communication Workers' Union, say the government's plan would "nationalise the pension fund and privatise the profit".But its critics, including the Communication Workers' Union, say the government's plan would "nationalise the pension fund and privatise the profit".
The vote on part-privatising the Royal Mail will be a test of Gordon Brown's leadership and authority but not in the way some are suggesting Nick RobinsonBBC political editor Read Nick's blog in full
So far 148 Labour MPs have signed a motion signalling they oppose the plan.So far 148 Labour MPs have signed a motion signalling they oppose the plan.
Following a week in which the government lost a Commons vote on the Gurkhas and had to water down its expenses proposals, there was much speculation about Gordon Brown's authority at the weekend. The vote on part-privatising the Royal Mail will be a test of Gordon Brown's leadership and authority but not in the way some are suggesting Nick RobinsonBBC political editor class="" href="http://www.bbc.co.uk/blogs/nickrobinson/2009/05/test_of_leaders.html">Read Nick's blog in full
And following a week in which the government lost a Commons vote on the Gurkhas and had to water down its expenses proposals, there was much speculation about Gordon Brown's authority at the weekend.
Labour backbencher John Grogan told BBC Radio 4's World at One there was a "question mark" over the government's plans regarding competition law - particularly if TNT, a big player in the UK's bulk business market, took a stake in Royal Mail. He said the postal regulator had told him there were "potential grounds for concern".
And he said he believed there could be up to 90 Labour MPs voting against the government.
While the vote could be held soon after the European and local elections on 4 June, he told the BBC: "I think it would be a kamikaze move quite frankly on behalf of ministers to bring it back then.
"The government has had a rough few weeks, we're approaching elections. A deal has got to be done between ministers and backbenchers."
He said some cabinet ministers had signalled they had concerns and if there was a major rebellion, "we'd be portrayed by opponents as a government becoming broken backed".
Cabinet ministers defended Mr Brown amid speculation about his position and Communities Secretary Hazel Blears denied that an article she wrote, complaining of a "lamentable failure" by ministers to get their message across, was not intended as an attack on him.Cabinet ministers defended Mr Brown amid speculation about his position and Communities Secretary Hazel Blears denied that an article she wrote, complaining of a "lamentable failure" by ministers to get their message across, was not intended as an attack on him.
'Political problem'
Compass chairman Neal Lawson told the BBC the group's proposal was "to try and find a way out of this mess".Compass chairman Neal Lawson told the BBC the group's proposal was "to try and find a way out of this mess".
"At the moment they can't get it through Parliament with the support of Labour MPs," he said."At the moment they can't get it through Parliament with the support of Labour MPs," he said.
"I think they know there's a political problem, given last week, given what is likely to be unsatisfactory results in June.""I think they know there's a political problem, given last week, given what is likely to be unsatisfactory results in June."
Report denied The Guardian had reported aides to the prime minister were talking to Labour rebels about Mr Lawson's proposal.
The Guardian had reported aides to the prime minister were talking to Labour rebels about the Compass proposal. But a Downing Street spokesman said: "We do not believe his alternative is workable and it is not under consideration."
A Compass pamphlet published on Tuesday calls on all sides of the Labour party to "step back from the brink" and give support to the idea of keeping Royal Mail in the public sector.
But a Downing Street spokesman 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."
Conservative leader David Cameron said his party would support the government's part-privatisation plan, which they believed was "right".Conservative leader David Cameron said his party would support the government's part-privatisation plan, which they believed was "right".
He told the BBC: "I would say to Gordon Brown and his government: 'Don't go faint hearted on this. Do what's right, the Conservatives will support you in the division lobbies to get this through Parliament."He told the BBC: "I would say to Gordon Brown and his government: 'Don't go faint hearted on this. Do what's right, the Conservatives will support you in the division lobbies to get this through Parliament."