Royal Mail sale plans are put on hold

Published on Monday 29 June 2009 09:59

PLANS to sell a minority stake in Royal Mail are set to be put on ice, the business secretary Peter Mandelson has admitted.

Lord Mandelson said lack of space in the legislative programme in the run-up to the summer recess could force the delay, but added he still hoped to pass the legislation required for the sell-off before the next election.

He said: "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."

Lord Mandelson said that current financial uncertainty was also a reason to delay legislation. Private equity firm CVC Capital Partners is the only bidder so far, with its bid thought to have been less than 2 billion.

Lord Mandelson also took an optimistic view on the economy, saying that Chancellor Alistair Darling's forecasts of a return to growth this year were "on target".

He added: "The worst is behind us. The fall in demand, market activity and reduction in bank lending is now bottoming out. These are encouraging signs."

His comments come as Gordon Brown launches Labour's new policy document, Building Britain's Future, billed as Labour's programme for the rest of this parliament.