UK

Royal Mail Was 'Botched Privatisation' Leaving Taxpayers 'Short-Changed' Says Labour's Chuka Umunna

10/01/2014 07:30 GMT | Updated 23/01/2014 15:53 GMT
Philip Toscano/PA Archive
Royal Mail postboxes outside a Post Office near Covent Garden, London.

Has the entire nation been short-changed at the Post Office?

The government of a "botched privatisation" over its controversial sell off of Royal Mail, saying taxpayers have lost out hundreds of millions of pounds.

Three months after the flotation, the opposition said the postal group's share price was more than 70% higher than the 330p at the time of privatisation last October.

royal mail post office

Taxpayers may have lost out on hundreds of millions of pounds

The price has remained above 500p, "dramatically" higher than the figure set by the coalition, said Labour, adding that Business Secretary Vince Cable had maintained that judgment should be passed on the sale price of Royal Mail after three months.

Shadow business secretary Chuka Umunna, said: "On the day the Royal Mail fire sale went ahead Vince Cable was clear that the Tory-led Government should be judged on the basis of the price of Royal Mail shares after three months.

"Three months later, the Business Secretary's dismissal of the sharp rise in share price as 'froth' has been demolished and 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.

"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."

Billy Hayes, general secretary of the Communication Workers Union, said: "Three months ago we had 'Cable froth' and now we have taxpayers 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."