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Royal Mail sale 'facing delays' Royal Mail sale plans 'delayed'
(19 minutes later)
Lord Mandelson has said plans to sell a minority stake in Royal Mail to a private company may be delayed. Lord Mandelson has said plans to sell a minority stake in Royal Mail to a private company are being delayed.
In an interview with the Financial Times, the business secretary said the plan was being "jostled for space" in the government's legislative programme. The business secretary says the bill which would allow the controversial move was being "jostled for space" in the government's legislative programme.
He spoke as ministers prepare to unveil his legislative plans for the year. It was due to go to Parliament before the summer break but Lord Mandelson told the BBC that it not do so now, adding that it would happen "later".
And he told the BBC that the government would not now hold a spending review before the next election - but claimed they would outspend the Conservatives. The Royal Mail reforms are opposed by unions and many Labour MPs.
Lord Mandelson told the paper the "worst is behind us" on the economy and a return to growth would help Labour meet its aims to "maintain frontline spending". More than 140 Labour backbenchers have signed a Commons motion critical of the plan and there have also been rumours for weeks that the whole scheme could be shelved.
"The fall in demand, market activity and reduction in bank lending is now bottoming out. These are encouraging signs," he said. But Lord Mandelson has said the company cannot survive without it and he told BBC One's Breakfast that its finances were "reaching crisis point".
He also gave his backing to forecasts by the chancellor, Alistair Darling, of a return to growth. In a separate interview with the Financial Times Lord Mandelson said he still hoped to get the necessary legislation on the statute book before the next election.
Depressed markets
Part-privatisation of the Royal Mail is unpopular with many Labour MPs but Lord Mandelson has said the company cannot survive without it.
More than 140 Labour backbenchers have signed a Commons motion critical of the plan.
There have also been rumours for weeks that the whole scheme could be shelved.
Lord Mandelson told the FT he still hoped to get the necessary legislation on the statute book before the next election.
But, he said, it may be difficult to do so before the House of Commons breaks for the summer, as was originally scheduled.But, he said, it may be difficult to do so before the House of Commons breaks for the summer, as was originally scheduled.
FROM THE TODAY PROGRAMME More from Today programmeFROM THE TODAY PROGRAMME More from Today programme
He told the paper: "I want to retain the slot, but... I have to concede that the original linking of the legislative passage and the bidding process for the strategic partner has been decoupled."He told the paper: "I want to retain the slot, but... I have to concede that the original linking of the legislative passage and the bidding process for the strategic partner has been decoupled."
He pointed to the depressed state of the markets, meaning the sell-off was unlikely to raise a substantial amount of money, as another reason for delaying legislation to allow the sale.He pointed to the depressed state of the markets, meaning the sell-off was unlikely to raise a substantial amount of money, as another reason for delaying legislation to allow the sale.
BBC political correspondent Iain Watson said the political point of these plans was to draw dividing lines with the Conservatives rather than to reopen battles within the Labour party. BBC political correspondent Iain Watson said any delay in part-privatisation of Royal Mail would boost the morale of Labour Party activists but it was also likely to be seen as a climbdown by political opponents.
He added that any delay in part-privatisation of Royal Mail would boost the morale of party activists but it was also likely to be seen as a climbdown by political opponents.
'Defter and smarter''Defter and smarter'
Lord Mandelson's comments come on the day the Prime Minister will unveil the government's plans for the year ahead.Lord Mandelson's comments come on the day the Prime Minister will unveil the government's plans for the year ahead.
Among the announcements will be expansions to health care in England - a pledge that patients suspected of having cancer will be able to see a specialist within two weeks, and an entitlement to a free health check for everyone over 40.Among the announcements will be expansions to health care in England - a pledge that patients suspected of having cancer will be able to see a specialist within two weeks, and an entitlement to a free health check for everyone over 40.
Public spending and alleged cuts are expected to be a big focus in the build-up to the next election.Public spending and alleged cuts are expected to be a big focus in the build-up to the next election.
Labour maintain improvements in public services can be made despite the tougher economic climate. However, the Tories accuse them of dishonesty and keeping the public in the dark. Labour maintain improvements in public services can be made despite the tougher economic climate - although Lord Mandelson . However, the Tories accuse them of dishonesty and keeping the public in the dark.
On Friday, Environment Secretary Hilary Benn appeared to suggest that his department would have less to spend after the next election - the first minister to publicly acknowledge this - but No 10 rejected his claims.On Friday, Environment Secretary Hilary Benn appeared to suggest that his department would have less to spend after the next election - the first minister to publicly acknowledge this - but No 10 rejected his claims.
To reinforce this, Ed Balls, one of Gordon Brown's closest allies, denied future cuts were inevitable during an interview two days later on the BBC's Andrew Marr Show.To reinforce this, Ed Balls, one of Gordon Brown's closest allies, denied future cuts were inevitable during an interview two days later on the BBC's Andrew Marr Show.
The schools secretary said ministers would have to be "defter and smarter" when it came to public spending.The schools secretary said ministers would have to be "defter and smarter" when it came to public spending.