New figures show taxpayers lost billions on Royal Mail privatisation

New figures reveal that taxpayers lost billions of pounds in the privatisation of the Royal Mail.

New figures reveal that taxpayers lost billions of pounds in the privatisation of the Royal Mail.

The figures were revealed by business minister Michael Fallon in answer to a written parliamentary question by Labour MP Jim Cunningham.

The answer to the question reveals bank valuations of the Royal Mail carried out before it was privatised. The highest of these estimated its value at £8.67 billion.  This is in contrast to the £3.3 billion which it was sold for in October last year.

The new information shows that 21 banks made estimates of the Royal Mail’s value, and that all but four of the lowest valuations were higher than the amount for which the organisation was sold off.

The value of Royal Mail shares have also risen sharply since they were sold by the government, from £3.30 a share in October to their value last night of £5.98.

This news has increased the pressure on business secretary Vince Cable, who has been widely criticised for selling off the Royal Mail for too little.

Billy Hayes, general secretary of the Communication Workers Union, called the privatisation of the Royal Mail “disgraceful”, and said it had been implemented for “political purposes” to increase the profits of investors, leaving taxpayers short-changed.

And Business journalist and investment manager Jonathan Davis said:

“Whoever made the decision did so, I am sure, for political purposes rather than for financial purposes…The Royal Mail was sold off far too cheaply and it is taxpayers in the end who were badly done by.”

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