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| Version 7 | Version 8 |
|---|---|
| U-turn claim as Mail sale shelved | U-turn claim as Mail sale shelved |
| (about 4 hours later) | |
| Labour has been accused of another U-turn after Lord Mandelson said the partial sell-off of Royal Mail will not proceed in the "current circumstances". | Labour has been accused of another U-turn after Lord Mandelson said the partial sell-off of Royal Mail will not proceed in the "current circumstances". |
| The business secretary announced in the House of Lords that the state of the economy had made it "impossible" to complete a deal on favourable terms. | The business secretary announced in the House of Lords that the state of the economy had made it "impossible" to complete a deal on favourable terms. |
| Senior Labour MP John McFall denied the move was a blow for the party, saying the taxpayer must have value for money. | |
| The Tories said the government was in a state of "paralysed indecision". | The Tories said the government was in a state of "paralysed indecision". |
| The partial sell-off, opposed by many Labour MPs, had been due to go before Parliament before the summer break. | |
| The shelving of the plan follows Tuesday's partial U-turn on ID cards and a Commons defeat on part of its bill to clean up Parliament. | The shelving of the plan follows Tuesday's partial U-turn on ID cards and a Commons defeat on part of its bill to clean up Parliament. |
| The BBC's Political Editor Nick Robinson said these setbacks showed that the government was struggling to impose its authority on an almost daily basis. | The BBC's Political Editor Nick Robinson said these setbacks showed that the government was struggling to impose its authority on an almost daily basis. |
| 'Impossible to conclude' | 'Impossible to conclude' |
| Lord Mandelson said the government remained convinced that selling off part of the Royal Mail was the best way forward and the issue would be revisited when market conditions changed. | Lord Mandelson said the government remained convinced that selling off part of the Royal Mail was the best way forward and the issue would be revisited when market conditions changed. |
| BBC chief political correspondent James Landale says: | BBC chief political correspondent James Landale says: |
| This is a huge setback for the government. | This is a huge setback for the government. |
| Royal Mail part-privatisation was the key litmus test for public sector reform for Gordon Brown's administration. | Royal Mail part-privatisation was the key litmus test for public sector reform for Gordon Brown's administration. |
| But this is Lord Mandelson recognising political reality - namely that if no-one is going to buy this bit of the Royal Mail, it was simply not worth all the political aggravation and battles with Labour backbenchers that he would face. | But this is Lord Mandelson recognising political reality - namely that if no-one is going to buy this bit of the Royal Mail, it was simply not worth all the political aggravation and battles with Labour backbenchers that he would face. |
| Ministers are being very open about that - there was no point having a row if the sale were not possible. | Ministers are being very open about that - there was no point having a row if the sale were not possible. |
| He told peers that under current market conditions it would be "impossible to conclude" the process in a manner which would "secure value for the taxpayer". | He told peers that under current market conditions it would be "impossible to conclude" the process in a manner which would "secure value for the taxpayer". |
| "We have thoroughly tested the market to see who is interested in partnership, but economic circumstances, I need hardly point out, are extremely difficult," he said. | "We have thoroughly tested the market to see who is interested in partnership, but economic circumstances, I need hardly point out, are extremely difficult," he said. |
| He continued: "I have always been clear that we would only do a deal with the private sector if it represented value for money for the taxpayer." | He continued: "I have always been clear that we would only do a deal with the private sector if it represented value for money for the taxpayer." |
| Mr McFall, the treasury select committee chairman, re-iterated that the government planned to revisit the issue when market conditions changed. "We need value for money for the taxpayer," he said. | |
| Ministers say private sector money needs to be brought in to help rescue the Royal Mail as it faces a pension deficit estimated at up to £8bn. | Ministers say private sector money needs to be brought in to help rescue the Royal Mail as it faces a pension deficit estimated at up to £8bn. |
| Former postman and Labour peer Lord Clarke of Hampstead said Royal Mail workers and management were "living without certainty" because of the pension deficit. | Former postman and Labour peer Lord Clarke of Hampstead said Royal Mail workers and management were "living without certainty" because of the pension deficit. |
| Lord Mandelson said this "remains a matter for the company and the pension trustees". | Lord Mandelson said this "remains a matter for the company and the pension trustees". |
| For the Conservatives, Shadow Business Secretary Ken Clarke said the government had been left without a credible plan for Royal Mail's future. | For the Conservatives, Shadow Business Secretary Ken Clarke said the government had been left without a credible plan for Royal Mail's future. |
| Shadow Business Secretary Ken Clarke: 'Government in a state of paralysed indecision' | Shadow Business Secretary Ken Clarke: 'Government in a state of paralysed indecision' |
| "Their policy is to do nothing, which they have been telling us for the last few months will be disastrous for Royal Mail," he said. | "Their policy is to do nothing, which they have been telling us for the last few months will be disastrous for Royal Mail," he said. |
| The Lib Dems said the announcement had left Royal Mail in "limbo". | The Lib Dems said the announcement had left Royal Mail in "limbo". |
| "This is an humiliating climbdown for the government," said the party's business spokesman John Thurso. | "This is an humiliating climbdown for the government," said the party's business spokesman John Thurso. |
| "It is quite clear that Gordon Brown no longer has the political will to fight the unions and opponents on his own backbenches." | "It is quite clear that Gordon Brown no longer has the political will to fight the unions and opponents on his own backbenches." |
| And Richard Hooper, the man whose review of Royal Mail last year recommended the part-privatisation, said the company was "in crisis". | And Richard Hooper, the man whose review of Royal Mail last year recommended the part-privatisation, said the company was "in crisis". |
| But a spokesman for the prime minister said the government would "return to the issue when market conditions change". | But a spokesman for the prime minister said the government would "return to the issue when market conditions change". |
| Pension deficit | Pension deficit |
| According to BBC political correspondent Jo Coburn, a source close to Lord Mandelson said the business secretary reached the view that creating the controversy made little sense when "we knew we couldn't implement it in the immediate future". | According to BBC political correspondent Jo Coburn, a source close to Lord Mandelson said the business secretary reached the view that creating the controversy made little sense when "we knew we couldn't implement it in the immediate future". |
| Billy Hayes, general secretary of the Communication Workers Union - which was strongly opposed to the proposal - said the government had "not only looked at market forces but... listened to the British public". | Billy Hayes, general secretary of the Communication Workers Union - which was strongly opposed to the proposal - said the government had "not only looked at market forces but... listened to the British public". |
| The problem for Peter Mandelson is that market conditions were - if anything - even worse on 16 December last year, when he embarked on his adventure to partly privatise this historic public service Robert PestonBBC business editor Read Robert's blog in full | The problem for Peter Mandelson is that market conditions were - if anything - even worse on 16 December last year, when he embarked on his adventure to partly privatise this historic public service Robert PestonBBC business editor Read Robert's blog in full |
| The business secretary said on Monday that the bill was being "jostled for space" among other legislation ministers wanted to conclude before Parliament breaks for the summer. | The business secretary said on Monday that the bill was being "jostled for space" among other legislation ministers wanted to conclude before Parliament breaks for the summer. |
| Lord Mandelson said on Monday that the partial sell-off would not happen until "later", but the Lords statement is the first time he has confirmed that the part sale will definitely not go ahead in the near future. | Lord Mandelson said on Monday that the partial sell-off would not happen until "later", but the Lords statement is the first time he has confirmed that the part sale will definitely not go ahead in the near future. |
| There has been growing speculation that the partial sell-off, which is a cause of discord within the Labour Party, would not go ahead before the next election. | There has been growing speculation that the partial sell-off, which is a cause of discord within the Labour Party, would not go ahead before the next election. |
| More than 140 Labour backbenchers had signed a Commons motion critical of the plan and there had been rumours for weeks that the scheme could be shelved. | More than 140 Labour backbenchers had signed a Commons motion critical of the plan and there had been rumours for weeks that the scheme could be shelved. |