By George Parker and Brian Groom Published: June 28 2009 23:36 | Last updated: June 29 2009 07:38 Peter Mandelson on Monday sets out Labour’s battle lines for the next election, promising his party will outspend and outreform the Conservatives on public services. But legislation to shake up Royal Mail may be put on hold. Lord Mandelson, business secretary, told the Financial Times “the worst is behind us” on the economy, claiming that a pre-election return to growth would help Labour meet its ambition “to maintain frontline spending and investment”. He promised his party would mount an aggressively “New Labour” campaign, focused on more consumer choice in public services, a theme to be elaborated on Monday in a “Building Britain’s Future” document to be launched by Gordon Brown. But Lord Mandelson admitted he may be forced to put on ice his planned sale of a minority stake in Royal Mail, which is fiercely opposed by Labour MPs. He had planned to present legislation to the House of Commons before the summer break, but says he is being “jostled” for space in the legislative programme. “I want to retain the slot, but . . . I have to concede that the original linking of the legislative passage and the bidding process for the strategic partner has been decoupled,” he said. He pointed to the depressed state of the markets as a reason for delaying legislation to allow the sale. So far the only bidder is CVC Capital Partners, the private equity firm. It is thought to have submitted an initial bid of less than £2bn. Lord Mandelson said it was still his intention to legislate before the election and that he would not retreat on his insistence that there would be no taxpayer bail-out of the Royal Mail pension fund unless the private sector was involved. Labour’s focus at the election would be to present itself as prepared to use a recovery to maintain public spending in key areas – suggesting increases at least in line with inflation. “The worst is behind us,” he said. “The fall in demand, market activity and reduction in bank lending is now bottoming out. These are encouraging signs.” He said the forecasts of Alistair Darling, chancellor, of a return to growth this year were “on target”. This would allow Labour to give outlines of its spending plans, short of a full departmental spending review. “We will have a better picture of likely growth rates and whether we have resumed the trend rate of growth, but that will probably be too early for any spending review to take place, and not necessary, because the current round continues until 2011,” he said. Lord Mandelson will on Monday give details of a new venture capital innovation fund. On the bunker: Although Lord Mandelson shares advisory duties in Number 10 with Ed Balls, an old foe, he seems less happy about the growing presence in the inner circle of Shaun Woodward, a Tory defector and now Northern Ireland secretary. Gordon Brown rates Mr Woodward and turns to him for advice – most noticeably during prime minister’s question time. But Whitehall insiders suggest that Lord Mandelson finds the Northern Ireland secretary a doleful presence and questions his judgment. Asked about Mr Woodward’s role, he is icily precise. “I have meetings with the prime minister and Ed Balls because Ed plays an informal role as well – as he did at the Treasury,” he says. “But my main desire is to weld together the team of full-time staff working in central government.” On whether he endorses the advice being offered by the Northern Ireland secretary, he replies: “I don’t know. “What is the advice being dispensed by Mr. Woodward?” On his new department: Lord Mandelson says he spends “80 per cent” of his time in his expanded empire at the Department of Business, Innovation and Skills, which he describes as “a department for the microeconomy, with a remit to nurture knowledge and enterprise and invest in the UK’s future economic strengths”. The peer maintains that he is invigorated by taking over responsibilities for universities – some in higher education fear that the sector could be neglected – and sees them as essential in driving the economy. Lord Mandelson identifies growth sectors, including financial services, the digital economy, life sciences and low-carbon industries. A new skills strategy is to be be announced in the autumn and his department will promote science, research and development and flexible labour markets. Sketching out his approach to “industrial activism”, Lord Mandelson says: “We have to maintain investment in knowledge, its generation, its harnessing and application to the workforce and to all parts of industry.” On his future: Such has been Lord Mandelson’s rise since returning to Westminster in October, some have started asking a previously unthinkable question: might the 55-year-old one day renounce his life peerage, stand again as an MP and seek the Labour leadership? “It’s not legally possible to do that,” he says, before adding quickly: “Not that I’ve made any inquiry. Therefore I am trapped. I believe it is for life.” Lord Mandelson then suggests that Labour might change the law to smooth his return to the House of Commons, raising a menacing eyebrow. Although the peer insists he is “teasing”, stranger things have happened in his career. If Labour were to win again, Lord Mandelson says he would like to carry on as business secretary or in another job – foreign secretary would be his dream. “When you’ve had the ups and downs that I’ve had in my ministerial career, to have discovered both warmth and stability is quite a boon in middle age,” he says.Mandelson draws election battle lines
Monday, 29 June 2009
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