Royal Mail deal hit by rebel MPs

Published on Saturday 14 February 2009 18:43

PLANS to part-privatise the Royal Mail were on the verge of collapse last night as Labour MPs warned ministers that the moves will "split the party down the middle" if they go ahead.

The 130 rebel MPs say that ministers will have to rely on Conservative support if they want to push the measures through.

Business Secretary Lord Mandelson has warned that the deal must go ahead or the service will be fatally undermined.

Post Office minister Pat McFadden added yesterday that the Royal Mail was set to lose 7% of its letters business this year, leading to further losses.

But the rebels say they are not going to give in, leading to claims that Labour chief whip Nick Brown has warned he cannot get the votes required.

One of the leading members of the group, Scots Labour MP Michael Connarty, claimed last night that the party would only be able to win a vote on privatisation by relying on the Conservatives.

He said: "They will lose unless the Tories come in behind them which would be unforgivable and a serious breach of trust. It would be a suicide note for us."

McFadden said yesterday: "I do not think there is a full appreciation of the problems being faced by Royal Mail."

Central to the problem is its pension fund deficit of between 7bn and 9bn.