Taxpayers lost-out on £1bn because the UK Government underpriced the privatisation of Royal Mail.
was the major finding last week in a highly-critical report published
by the House of Commons committee on Business, Innovation and Skills.
The committee concluded that Tory-Lib Dem Ministers had been so
determined to push ahead with privatisation as quickly as possible they
had failed to get value for money for taxpayers.
Royal Mail was
privatised in October of last year when the UK Government sold 60% of
the publicly-owned asset. Shares were priced at 330p, giving the
company a value of £3.3bn. However, on the first day of trading, shares
jumped by 38% and continued to rise. Currently, Royal Mail is valued
at £1.4bn above the price for which the government sold it.
Ayrshire & Arran Labour MP Katy Clark is a member of the committee
on Business, Innovation and Skills. Speaking to the3towns, she said,
“This report confirms what we have known ever since Royal Mail was first
floated on the London Stock Exchange. The government sold Royal Mail on
the cheap. Priority investors have made multi-million pound profits
purchasing under-valued shares and selling them on: taxpayers have lost
Of the Committee’s investigation into the
privatisation, Ms Clark said, “After hearing from Ministers and
representatives from Lazard, the company that conducted the valuation of
Royal Mail, it is clear that little, if any, consideration was given to
value for money for the taxpayer when deciding the share price. The
report backs-up the view that I, and many others, have had for some time
that this was an ideologically-driven privatisation in which the
interests of city investors were above those of taxpayers and Royal Mail
customers. It has been a shambles from start to finish.”
Hayes, General Secretary of the Communication Workers Union, noted, “The
Business, Innovation and Skills Select Committee's damning report shows
the extent of the government's incompetence in the privatisation of