Labour urged to back Royal Mail renationalisation

THE SNP Government today called on Labour to match its pledge to re-nationalise the Royal Mail if it wins power - insisting this would kill the current privatisation plans “stone dead.”

Picture: PA

Alex Salmond announced yesterday that the SNP would bring the service back into public hands, unless the planned £3 billion sell-off - expected within weeks - is halted.

Experts are warning that the announcement could damage the price of Royal Mail ahead of the sale.

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The Scottish Government has called on David Cameron to place a moratorium on the privatisation until after the independence referendum next year and finance secretary John Swinney insisted today the sale could still be stopped.

“What the opposition would be better doing, especially the Labour party, would be making the same committment that we’ve given they they would take the assets back into public ownership,” he told BBC Radio Scotland today.

“I think that would kill the privatisation process stone dead.”

Asked if the pledge to renationalise was aimed at derailing the current sell-off, Mr Swinney said: “We want to stop the privatisation.

“We can’t be any clearer about that. We think this is wrong, the people of our country think it’s wrong, the overwhelming majority of UK members of Parliament coming from Scotland think it’s wrong.

“So we have a classic example of a UK Government that we didn’t elect pursuing a policy proposal that’s completely and utterly at odds with the opinions of our people and the democratic respresentatives of out people.”

Mr Swinney said that Scotland would get a share of any proceeds from the sale of Royal Mail and indicated this would be held back to fund any future re-nationalisation process.

“There will be a receipt that arises out of privatisation and the resources would be available to deal with the issues of taking us back into public ownership,” he said.

Sell off price

Postal Expert David Stubbs said the Scottish Government move could undermine the value of the firm in the run-up to the sell-off which already faces problems over the threat of industrial action.

Stubbs said: “That uncertainty is depressing the value of the business. When we looked at the sale value of £2-3billion which is the figure being touted around that includes quite a significant risk premium for the potential buyer.

“The immediate effect of this will be to depress the value even further.”