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Labour says Royal Mail privatisation 'botched' | Labour says Royal Mail privatisation 'botched' |
(about 1 hour later) | |
The government "botched" the privatisation of Royal Mail, short-changing taxpayers by hundreds of millions of pounds, by selling shares too cheaply, Labour has said. | |
Three months on from privatisation, shares are trading around 561p, 70% higher than the original price of 330p. | |
The government had said the share price should only be judged after three months. | |
The Business Minister Michael Fallon denied shares were sold too cheaply. | |
'Duped'? | |
Shadow business secretary Chuka Umunna said the shares had consistently been above 500p ever since the privatisation. | |
At the time of the share sale, the Business Secretary Vince Cable had said judgment should be passed on the sale price after three, six or 12 months. | |
Mr Umunna added: "Three months later, the Business Secretary's dismissal of the sharp rise in share price as 'froth' has been demolished. | |
"Increasingly it looks like the taxpayer has been left short-changed at a time when services are being cut and families are struggling with David Cameron's cost of living crisis. | |
"We know that Vince Cable considered, then rejected, the option of floating Royal Mail at a higher price which would have brought in more cash for taxpayers. | "We know that Vince Cable considered, then rejected, the option of floating Royal Mail at a higher price which would have brought in more cash for taxpayers. |
"He still has serious outstanding questions to answer on the price he could have received three months ago in respect of what increasingly looks like a botched privatisation." | "He still has serious outstanding questions to answer on the price he could have received three months ago in respect of what increasingly looks like a botched privatisation." |
Business Minister Michael Fallon told the BBC he could not have sold Royal Mail for any more because the long-term investors he was targeting had told him they would not pay more than £3bn and that it was a risky sale because the company was less profitable than its competitors. | |
Mr Fallon said he had "certainly not" been duped, highlighting independent advice the government took in the run up to the sale. | |
He said he was trying to avoid the Royal Mail coming back to the taxpayer to be bailed out to maintain the service, and that the sale had been a success. | |
But he added: "It is very easy to look back in hindsight." | |
Billy Hayes, general secretary of the Communication Workers Union, said taxpayers have been "left with a bad taste as hundreds of millions of pounds have been lost". | Billy Hayes, general secretary of the Communication Workers Union, said taxpayers have been "left with a bad taste as hundreds of millions of pounds have been lost". |
"The British public were against the sale of this great public service as consumers and now they know for sure they got a bad deal as taxpayers too." | "The British public were against the sale of this great public service as consumers and now they know for sure they got a bad deal as taxpayers too." |