Taxpayers were short-changed by as much as £1bn by the sale of Royal Mail, according to a new report.
Business secretary Vince Cable rejected the option of floating Royal Mail at a higher price
Taxpayers were short-changed by as much as £1bn by the sale of Royal Mail, according to a new report from the Business, Innovation and Skills select committee (BIS).
Royal Mail shares were priced at 330p by the government but now stand at 473p, after reaching a 618p per share.
Labour’s shadow minister for trade and industry Ian Murray MP said City investors had “made a killing at the public’s expense”.
The committee said that the advice the government received about the sale “wasn’t up to standard”.
“We believe that fear of failure and poor quality advice led to a significant underestimate of the demand for Royal Mail shares,” said committee chair and Labour MP and Adrian Bailey.
Business minister Michael Fallon said in 2012 that the government had “no intention of selling off Royal Mail cheaply”. But the sale price set by the government was later branded “too cautious” by the National Audit Office.
Taxpayers made around £2bn from the sale of Royal Mail. However if the shares had been sold at 473p, the taxpayer, would have brought in around £1bn more.
At the time of the sale business secretary Vince Cable rejected the option of floating Royal Mail at a higher price which would have brought in more money for taxpayers.Like this article? Sign up to Left Foot Forward's weekday email for the latest progressive news and comment - and support campaigning journalism by making a donation today.