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Labour faces losing a big union backer as the rebellion against Lord Mandelson’s plans to sell part of the Royal Mail gathers force.
The Communication Workers Union (CWU) will ask its 250,000 members to approve a formal split from the party if the Business Secretary presses ahead, The Times has learnt. A ministerial aide resigned in protest yesterday, delivering a warning to Gordon Brown that he faces a serious revolt over the issue.
Jim McGovern quit as Parliamentary Private Secretary to Pat McFadden, the Post Office Minister, after the publication on Tuesday of a report recommending an injection of private capital. The MP for Dundee West said that he could not support “what looks to me like partial privatisation of the Royal Mail. Pat McFadden said he welcomed an expression of interest from the Dutch postal company TNT. For me, it simply beggars belief that we would employ the services of a company from abroad to tell the Royal Mail where it is going wrong.”
Lord Mandelson insists that allowing a minority holding does not breach Labour’s manifesto obligation not to privatise the postal service. He will seek to reassure backbenchers at a meeting today.
Alan Johnson, the Health Secretary and a former general secretary of the CWU, dismissed suggestions that he opposed a partnership between Royal Mail and TNT. He is understood to have spoken in favour of the plans in Cabinet on Tuesday, insisting that they represented the postal service’s only hope of survival.
Declining volumes of mail and a rocketing pensions deficit have made some sort of private partnership vital, ministers believe. They promise full consultation over the sell-off — postponing a Commons clash until well into next year.
Lord Mandelson faces a more immediate threat from the CWU, however, since the union is committed to a ballot on splitting from Labour in the event of any attempt at privatisation. Its annual conference this year passed a resolution saying that the union “reaffirms its opposition to privatisation in any form. This includes outright privatisation, joint ventures, splitting the business and allowing private companies to take over parts of it or infusions of private capital”.
A Labour MP close the union said yesterday that it was likely to call a special conference and hold the ballot unless Lord Mandelson backed down.
The loss of the CWU — which has given Labour more than £5 million since 2001 and £500,000 over the past 12 months — would be a blow and might trigger supportive action from other unions.
A move to disaffiliate would mark the third split between Labour and the unions since 1997. But opposition from the CWU is potentially far more damaging than the previous splits by smaller unions because the CWU represents workers across a number of large industries. In 2004 the Rail, Maritime and Transport (RMT) union was expelled by Labour for backing the Scottish Socialist Party. Later that year the Fire Brigades Union (FBU) voted for disaffiliation after the long and bitter firefighters’ strike of 2003. Although the RMT and the FBU are industrially powerful, their membership is a fraction of the CWU’s.
Royal Mail workers are already taking action from tomorrow over plans to close sorting centres. Workers in Crewe, Coventry, Bolton, Stockport and Oxford will stage a 24-hour walkout. A strike in Liverpool was called off after an injunction was served.
Brendan Barber, the TUC General-Secretary, said: “The Government says that any joint venture doesn’t represent a watering-down of that commitment, but these proposals will raise fears that they are a step on the way to full privatisation. While moves to underwrite the pension deficit and a commitment to long-overdue modernisation are very welcome, privatisation cannot be an option.”

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More prudent for the public had the news been kept about privitisation until after Xmas delivery. Can we please have our 100's of Post Offices back which were the lifeblood of many communities? That would be a good start.
Stacey London, London, UK
postman 14 years used too like job hate it know if the propsed redundancies come up i will put both hands up
paul wilson , edinburgh , scotland
Surely Lord Mandleson knows that privatising a small part of the Royal Mail is just the thin end of the wedge. Out here, the Commonwealth Bank and Telstra started out that way and gradually became completely privatised. Telstra being the in the past, the Telegraphs side of Posts and Telegraphs.
margie , victoria, australia
Bill and Ben had 6 years and now they need an outside company to come in and run it? Most people would look to change the management. Last year profits went down but the CE pay went up 25%, he could try for a job at a bank, Who is happy with what they have done?
Paul, London, UK
is the Royal Mail not a public service anymore, if it is, that means it is the same as the police, fire, and NHS, public services - which do not have to make a profit,
which is ironic, because RM's profits have been creamed off by successive governments for years, whilst RM took a Pensions Holiday.
james Larkin, glasgow, scotland
If the CWU is going to continue holding the country to ransom, without any regard for what damage it is doing to the business it is in, much less the damage it is doing to public support for the post office, then maybe the best thing to do is privatise the whole thing !
Len, Cambridge, UK
The post office made a £600 million profit in 1997. By 1999 it was making a £400 million lose. Let see what happened here. Thats right Labour happened. You cannot let private companies take the only part of the postal service that make money, bulk mail and parcels, and still make money your self.
William, Manchester, England
This looks like a Brown and Mandelson scam to get their hands on the £30 billion Royal Mail pension pot, then transfer the whole liability to the taxpayer. Short term again for the government, long term pain for the taxpayer! Cynical or what?
JOHN KEATING, romsety, england
why would anyone want a minority shareholding in any British public service?
peter c, Devizes, Wessex
How dare this government privatise our Royal Mail. With the EU trying to close it down with its mass of directives which has stripped it of its ability to make a profit, this government now sees it as ripe for privatisation. Soon we will not have a national delivery but collect from a central point
Vanessa, London,
One wonders why any sensible person would want to buy any sort of share in the Post Office with its business diminishing and its huge pension fund deficit increasing.
Michael Smith, Southampton, UK
I'm a Postman on a rural delivery with 500 calls, I do the job properly and follow Royal Mail guidelines, but still claim, & cut-off when I need to fetch my 9yr old daughter from school.
And according to 'The Mythical Horse' (Pegasus) my round is too big even on the 4mph settings.
Dylan Pritchard, Caernarfon, Wales
Can't disagree more with Lorne - what business is it of governement to deliver letters & parcels? They should stick to sorting out the mess they have delivered to this country.
John, Northumberland,
No suprise that the toadying Alan Johnson backs the idea. He let the Tory Govt' of the 80's & 90's demand ever increasing profits from Royal Mail without re-investment. He along with the politicians and a union with no foresight bear a heavy responsability for the demise of Royal Mail.
Stuart, Gravesend,
Lord Mandelson insists that allowing a minority holding does not breach Labour's manifesto obligation not to privatise the postal sevice - and down is up!
Robin Paine, Phnom Penh, Cambodia
Anybody that still thinks a loss making organisation can continue without change is living in the wrong century. Time for Labour to show its reforming colours, cut the tie with the CWU and explore PPP options for the Post Office.
Ian, London, UK
Privatising the Post Office is just a daft idea - end of story.
Lorne, Ayr, UK