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Business Secretary Vince Cable refuses to quit over ‘successful Royal Mail sale’ as Labour attack ‘botched’ deal | |
(about 14 hours later) | |
Vince Cable shrugged off calls to resign over the controversial Royal Mail privatisation as he hit back at accusations that the business was sold on the cheap. | Vince Cable shrugged off calls to resign over the controversial Royal Mail privatisation as he hit back at accusations that the business was sold on the cheap. |
The Business Secretary was defiant following a damning report which suggested the Government could have cost the taxpayer as much as £1bn by undervaluing Royal Mail. Labour and trade unions have seized on the National Audit Office (NAO) report as evidence that the sale was seriously mishandled. | The Business Secretary was defiant following a damning report which suggested the Government could have cost the taxpayer as much as £1bn by undervaluing Royal Mail. Labour and trade unions have seized on the National Audit Office (NAO) report as evidence that the sale was seriously mishandled. |
It also emerged that “priority investors” who were offered extra shares in return for staying in for the long term, sold them almost instantly at a large profit. Twelve investors sold all or some of their holdings within the first few weeks of trading. | It also emerged that “priority investors” who were offered extra shares in return for staying in for the long term, sold them almost instantly at a large profit. Twelve investors sold all or some of their holdings within the first few weeks of trading. |
The shadow Business Secretary, Chuka Umunna, attacked the privatisation as a “first class disaster” which had left taxpayers short-changed and City institutions “laughing all the way to the bank”. He called on Mr Cable to at least apologise for the “botched” sale. | The shadow Business Secretary, Chuka Umunna, attacked the privatisation as a “first class disaster” which had left taxpayers short-changed and City institutions “laughing all the way to the bank”. He called on Mr Cable to at least apologise for the “botched” sale. |
Ben Bradshaw, a Labour MP, went further and challenged Mr Cable to consider his position as he was “responsible for such ruinous incompetence”. | Ben Bradshaw, a Labour MP, went further and challenged Mr Cable to consider his position as he was “responsible for such ruinous incompetence”. |
Mr Cable dismissed the call and said the last thing he intended to do was apologise for the sale which he regarded as a success. | Mr Cable dismissed the call and said the last thing he intended to do was apologise for the sale which he regarded as a success. |
Claiming the NAO report vindicated his approach, he argued: “A more aggressive approach to pricing would have introduced significantly greater risk and the advice we received in this respect was unambiguous.” | Claiming the NAO report vindicated his approach, he argued: “A more aggressive approach to pricing would have introduced significantly greater risk and the advice we received in this respect was unambiguous.” |
The Liberal Democrat Cabinet minister received David Cameron’s full backing. The Prime Minister told a Downing Street press conference that the country had benefited from a windfall through the sale and was now receiving taxes from a successful business. He said: “A decade ago this company was losing money and people thought it was in an unrecoverable situation.” | The Liberal Democrat Cabinet minister received David Cameron’s full backing. The Prime Minister told a Downing Street press conference that the country had benefited from a windfall through the sale and was now receiving taxes from a successful business. He said: “A decade ago this company was losing money and people thought it was in an unrecoverable situation.” |
The Unite union challenged ministers to name the 16 “priority investors” who were allocated shares during Royal Mail’s flotation. | The Unite union challenged ministers to name the 16 “priority investors” who were allocated shares during Royal Mail’s flotation. |
Brian Scott, a national union official, said: “It is unbelievable that any government thought it could reach a gentleman’s agreement with rapacious investors who were out to make a fast buck.” | Brian Scott, a national union official, said: “It is unbelievable that any government thought it could reach a gentleman’s agreement with rapacious investors who were out to make a fast buck.” |
The NAO said Mr Cable’s department took a “cautious” approach to the sale, resulting in shares being priced at a level substantially below the initial trading price. | The NAO said Mr Cable’s department took a “cautious” approach to the sale, resulting in shares being priced at a level substantially below the initial trading price. |
On the first day of trading last year, Royal Mail’s shares closed at 455p, 38 per cent higher than their price sale. | On the first day of trading last year, Royal Mail’s shares closed at 455p, 38 per cent higher than their price sale. |
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