Royal Mail privatisation plans in pieces

Controversial UK Government plans for part-privatisation of Royal Mail are “in pieces” after a Commons Committee said the government has not made the case for the move, and criticised the worrying lack of transparency over Lord Mandelson’s proposals.

SNP Postal Affairs spokesperson, Mike Weir MP, seized on the Business and Enterprise Committee report, which follows attacks on the privatisation proposals by unions, Labour MPs and party officials. 

Mr Weir said:

“Labour’s privatisation plans are now holed below the water line and sinking fast. 

”Backbench rebellions are one thing, but for the cross-party committee which is scrutinising these proposals to say they are not convinced leaves Lord Mandelson’s plans in pieces. 

“It is plain as day that privatisation would spell the beginning of the end for Royal Mail, and open the door to job losses, service cuts and a deterioration in the working conditions of postal workers.

“A private partner will only be concerned with profit, and Royal Mail must not loose the social focus which is essential for rural areas. Labour must ditch these ridiculous plans, and focus on investing in Royal Mail as a public service for the public good.

“Assurances that there could not be any further privatisation without new primary legislation, and setting out the Universal Service Obligation in legislation, are simply worthless.

”Such legislation could be introduced or amended at any time in a future parliament, and part-privatisation is the start of a slippery slope towards full privatisation.

“The future of Royal Mail as a public service is a vital interest to Scotland and every community and small business should make known their outright opposition to this crazy scheme.”


The Report follows evidence taken by the Committee on the Independent Review of the UK Postal Service and is intended to inform the House about the Postal Services Bill. The report variously notes:

- The Committee does not think the Government has yet made its case, and the Government needs to answer a number of important questions
- There is a worrying lack of transparency in the Government's proposals.
- The Committee do not believe a 30% stake from a private sector investor is an end-game. 
- The Committee believes Parliament is being asked to swap an existing system where it approves every share sale in Royal Mail, for one where it gives up these powers in return for a guarantee that the public's shareholding will always be over 50%.
- The Committee is not persuaded that the provisions contained in the Bill allowing such a partnership are necessary or desirable.  
- There is no clarity as to how the proceeds of any sale of a stake in Royal Mail would be used.
- It is entirely unacceptable that Parliament is being asked to approve such fundamental changes to Royal Mail Group when there is no indication of exactly how much money Royal Mail Group needs for investment and the Government is prevaricating about the use to which any private sector cash would be put.