Tuesday, 1 April 2014
Royal Fail, Royal Mail theft
Something many of us knew before hand anyway the but it is confirmed the Royal Mail was sold off on the cheap by the Tories. The privatisation of Royal Mail did not achieve the best value for taxpayers because of the government's "deep caution", the spending watchdog says. The National Audit Office said too much emphasis was put on completing the sale within this Parliament, at the expense of achieving better value for money. Royal Mail shares are now more than 70% higher than the original sale price of 330p in October 2013. The privatisation of Royal Mail took place amid huge public interest and the shares rose by 38% to 455p on their first day of trading, representing an increase in value of £750m for the new shareholders. The NAO report concluded that the Department for Business, Innovation and Skills was too cautious when setting the sale price of 330p per share. "The department was very keen to achieve its objective of selling Royal Mail, and was successful in getting the company listed on the FTSE 100," said Amyas Morse, head of the NAO. L Achieving the highest price possible at any cost and whatever the risk was never the aim of the sale” End Quote Vince Cable Business Secretary "Its approach, however, was marked by deep caution, the price of which was borne by the taxpayer." A planned postal workers' strike, which was eventually cancelled after the privatisation, also affected the government's sale price. Demand for Royal Mail shares was 24 times the maximum number available to investors, the NAO said, but the banks overseeing the sale advised there was not sufficient demand to justify a significantly higher figure. George Godber, a fund manager at Milton Group, told Radio 4 that he was "astounded" by the low price. "I thought it was significantly underpriced. In stock market terms, this was the London 2012 Olympic ticket moment, lots of people applied but very few got to go to the opening ceremony." Managers from two of these advising banks - Goldman Sachs and UBS - said market uncertainty and the complexity of the deal led them to a conservative price when they were questioned by MPs in November last year. As we seen last week the Royal Mail is already cost cutting looking to slash its workforce by 1600 predictably the CWU union makes a lot of noise but will anything be done about this? I doubt it much like the proposed strike back over privatisation which was more hot air from the likes of Billy Hayes and Dave Ward who would rather wait for a labour government. Labour have predictably come out saying the tax payer has been sold a short one and that Royal Mail was under sold but this miss's the glaring point that it shouldn’t have been sold off in the first place. Instead of ranting about how cheaply it was sold off how about making the case for renationalization and returning the organisation to public hands and running it for people’s needs not a few peoples profits.