Royal Mail sell-off shelved

THE government yesterday shelved controversial plans for a part-privatisation of the Royal Mail due to the depressed state of the economy.

Business Secretary Lord Mandelson told the House of Lords that “market conditions” had made it “impossible” to complete a deal on “favourable terms.”

He added there was “no prospect” of the proposed sale of up to 30 per cent of Royal Mail, but said the government “will return to the issue” when market conditions improve, without forecasting when he believed that might be.

The dramatic u-turn over the partial sell-off has been seen as fresh evidence of government paralysis, and an effort to avoid confrontation with unions and backbenchers over the controversial plans before an election.

Royal Mail’s pension deficit is expected to increase to £9bn later this year.