Royal Mail stake will be sold 'because economic recovery is months away' - Mandelson

by Noelle McElhatton, marketingdirectmag.co.uk 08-Jul-09, 13:06

LONDON - The part-privatisation of the Royal Mail will go ahead once the economy picks up, Lord Mandelson, the business secretary, reiterated yesterday.

Lord Mandelson’s assertion, made to MPs on the Business and Enterprise Committee yesterday, comes amid growing skepticism about the prospects for the sale of 30% of Royal Mail ahead of the next General Election.

Doubts about a sale started last week when the business secretary said he was delaying the sale until the economy improved enough to ensure a good price for a stake in Royal Mail.

But Lord Mandelson told MPs yesterday that the economy on the verge of recovery and that the Labour government remained committed to introducing a strategic minority partner for Royal Mail.

He said: "In the course of the coming months - it will be months, let me tell you - we will see things picking up, but we will only see things picking up if we maintain the government's current policies."

The business secretary admitted that he was "disappointed" at the delay but that the sale was in the hands of the markets here and as markets cheer up, profits improve and the bidding process becomes possible. Then, as the government has said, we'll be prepared to take this forward," he said.

Bidders would have to be "the right partners, with the right offer, to bring about the transformation of Royal Mail, offering the right degree of value for money to the taxpayer. At the moment those conditions don't exist."

"There is a crying need for modernisation of this business. Both management and union say they are up for this - I just wish they would get on and do it.''

Lord Mandelson also said the public deserved a modern and reliable mail service.