Everyone has been talking about a new era of nationalisation, but now business secretary Peter Mandelson has indicated that he may back partial privatisation of Royal Mail. The operator's dire financial situation is producing increasing pressure for part privatisation.
Lord Mandelson said his 1998 proposal to allow private sector stakes in the state-owned postal operator would have become law if he had kept his post as trade and industry secretary. A report from the Hooper review of postal services is imminent and may give Lord Mandelson the basis he needs to act. The review is expected to express doubts about Royal Mail's ability to continue offering a 'universal' one-price-goes-everywhere service to every address in the UK, without further multi-billion pound injections of capital.
Public ownership of Royal Mail is a fundamental commitment for many unions and backbenchers. The Communication Workers' Union has threatened to cut off funding to Labour if Royal Mail does not remain in public ownership. About half the Parliamentary Labour party signed an early day motion in 2005 demanding the government continue to own all shares in the operator. Labour's 2005 manifesto declared that there were no plans for privatisation.