Sale report a cover up

Lord Myners
Lord Myners

A Government-commissioned report into the privatisation of Royal Mail which found the sale achieved significant value has been branded a “cover up.”

Former city minister Lord Myners said the right decisions were made over the pricing of shares, and the sell-off executed with “considerable professionalism”, adding that it would have been risky to price shares higher than 350p to 360p.

Opponents have claimed that the Government could have received millions more, possibly £1 billion, if shares had been priced higher than 330p when the float went ahead in October 2013.

The Government sold 600 million shares, or 60 per cent of Royal Mail, raising nearly £2bn, so an extra 30p per share would have been worth £180m.

But Lord Myners said: “We found no evidence to challenge the general assertion that an IPO (initial public offering) price greater than 350-360p could have been achieved and we accept that a decision to revise the range would have come with added uncertainty and risk. The right decisions were made.”

Billy Hayes, general secretary of the Communication Workers Union, said: “Vince Cable appointed Lord Myners to mark his homework and unsurprisingly he’s endorsed the Government’s actions. As we anticipated from a government-commissioned report on privatisation of Royal Mail, it’s a cover-up.

“Lord Myners’ blames the Government’s pathetic excuse for an IPO on the threat of industrial action, a notion already dismissed as “overemphasised” by the Business Select Committee’s report published in July.

“It is plain wrong for Lord Myners to say no evidence was found that the share price was valued too low. What about the fact that the value of shares rocketed on the first day of trading and was massively over-subscribed?

“We wholeheartedly reject Vince Cable’s assertion that Royal Mail had to be sold to raise investment. The company was profitable before privatisation, making £440m last year.”