01 September 1997

PRESIDENT OF THE BOARD OF TRADE Margaret Beckett has decided that the Post Office should remain wholly in public ownership, according to information carefully leaked by 'civil service sources' [or a Labour spin doctor?]. The 'sources' also let it be known that the Treasury is determined to keep the PO within the restraints of the Public Service Borrowing Requirement, meaning that the corporation will be unable to attain its holy grail of raising capital on the open markets. The PSBR also effectively bars the Post Office from entering into joint ventures with the private sector - not in itself per se, but because it automatically confers underwriting by the government on any PO commercial venture - a situation that would almost certainly fall foul of European competition law. Ian McCartney, Trade and Industry Minister, officially broke the news at the month end to the PO’s top duo, chairman Michael Heron and chief executive John Roberts. [Their undoubted disappointment will be but a trickle compared to the tidal wave of grief in the City where the rumoured 49% flotation would have been worth up to £2.5bn.]