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UK's Brown faces backbench revolt over Royal Mail

Wed Jan 14, 2009 12:00am EST

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* 66 backbenchers sign motion against part-privatisation

* Former ministers among the signatories

* Dutch company TMT previously linked with the sale

* Follows report recommending part sale

LONDON, Jan 14 (Reuters) - UK premier Gordon Brown was facing a major back-bench revolt on Wednesday after 66 backbench MPs put their name to a motion opposing the partial privatisation of the Royal Mail.

Former ministers Malcolm Wicks, Frank Dobson and Michael Meacher are among those who have signed the motion, which warns that plans to sell a minority stake in the postal group would "risk fracturing one of Britain's greatest public services."

In December, British business minister Peter Mandelson said the state-owned postal operator should be partially privatised, and welcomed an approach by Dutch logistics company TNT NV(TNT.AS) to take a minority stake in the company.

But the motion, to appear on the Commons order paper on Wednesday, requests that MPs reject recommendations that part of Royal Mail should be sold.

MP Geraldine Smith, who tabled the motion, said in a statement: "Royal Mail is one of the country's oldest and most respected public bodies. In recent years, it has been exposed to ever-increasing, unfair competition by the regulator. Part-privatisation is not the answer."

In December, Mandelson, presenting the results of the independent Hooper review, said the operations arm of the Royal Mail -- although not its Post Office retail outlets -- needed to be partly privatised to remain commercially viable.

At the time, TNT said in a statement that its interest in Royal Mail hinged on the full implementation of Mandelson's reform proposals, including changes to regulation and the government paying off much of Royal Mail's company pension liabilities.

MP John Grogan, who signed the motion to prevent privatisation, said: "In February 2007, the Government agreed a 1.2 billion pounds loan to modernise the sorting offices. It is surprising that two years later only half of this money has been spent.

He added that 600 million pounds of Government money remained available to fund modernisation and there was no need for private capital. (Reporting by Ben Deighton; Editing by Andre Grenon)



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