Tories 'would support sale of Royal Mail'

by Noelle McElhatton, marketingdirectmag.co.uk 03-Jul-09, 10:58

LONDON - A Tory government would revive plans to sell a stake in Royal Mail, party insiders told the Financial Times yesterday.

There has been uncertainty until now about the Conservative party line on part-privatisation, with Tory leader David Cameron appearing reluctant to embrace a policy that has attracted vociferous opposition.

The news comes after the Government announced on Wednesday it was shelving plans to sell a 30% stake until the economy – and the prospect of getting a good price – improves.

For this reason the sale is thought unlikely before the next General Election, placing the ball in the Tory party’s court.

Royal Mail’s growing pensions deficit has made private funding a palatable option for the Government, despite opposition from Labour MPs and trade unions.

But unnamed Tory sources told the FT that Cameron may instead support a combination of part-privatisation and a taxpayer-funded pensions bail-out.

Royal Mail has until 30 June 2010 to agree a plan with its pensions trustee for repaying the deficit, expected to reach between £9bn and £10bn.

The newspaper also reports that Ken Clarke, the shadow business secretary, supports full privatisation of Royal Mail.