UK - The Department for Business, Innovation and Skills (BIS) has rejected reports that the part-privatisation section of the Postal Services Bill has been scrapped, claiming all three parts of the Bill will go ahead as a "package", albeit with a potential delay.

Media reports had suggested the measure to sell a 30% stake of Royal Mail to a "strategic partner" had been dropped to avoid a rebellion by MPs, as 180 members including 148 Labour MPs have signed an Early Day Motion (EDM) rejecting this particular recommendation from the Hooper report.

In response, a spokesman for BIS pointed out Lord Peter Mandelson, secretary of state for BIS, had confirmed in a television show on Sunday that the Bill would go ahead as a package, which includes government taking on the group's pension deficit, reforming regulation and finding a partner to purchase a minority stake in the business.

He stated that the Bill, which has already passed through the House of Lords, "mirrors exactly what we were recommended to introduce as a result of the Hooper Review", adding that these measures "will stick together".

However, the BIS said the timing of the Bill, which is waiting for a second reading in the House of Commons, is "being decided by the business managers at the moment".

The department, a newly-formed entity from the merger of the department of Business, enterprise and regulatory reform  (BERR) with the department of innovation, universities and skills (DIUS), also admitted that the sale of the minority stake "is not a straight forward process and could take a little bit of time".

It confirmed Lord Mandelson had set out the government's position on the sale at the third reading of the Bill on 20 May 2009, in which he warned any strategic partner must offer value for money for the taxpayer.

He stated: "We will not do a deal at any price. There is some way to go and it may well take longer to reach agreement with a partner than it takes to debate and agree this Bill."

The rumour that the part-privatisation of the Bill had been dropped follows comments from Royal Mail in which it warned if the Postal Services Bill fails and the government does not take on the responsibility for the historic deficit in the Royal Mail Pension Plan (RMPP) then the scheme may have to close completely. (See earlier IPE article: Royal Mail may shut scheme if gov't Bill fails)

If you have any comments you would like to add to this or any other story, contact Nyree Stewart on + 44 (0)20 7261 4618 or email nyree.stewart@ipe.com

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