MPs claim Royal Mail sell-off cost taxpayers £1 billion

Taxpayers have lost £1 billion over Royal Mail's privatisation because the Government underestimated demand for shares, MPs have reported.

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MP: Signs of high demand 'before Royal Mail sale'

There were indications before the sell-off of Royal Mail began of demand "really taking off", according to the chair of the business, innovation and skills select committee.

Labour's Adrian Bailey dismissed claims criticism of the sell-off was all in hindsight and told Good Morning Britain the Government failed to act on clear signs of high demand for shares.

"There were indications before the float that demand for these shares were really taking off. Institutional investors over-subscribed it by 24 times and retail investors...by seven times."

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Royal Mail shares in numbers

MPs have accused the Government of shortchanging taxpayers out of £1 billion over the Royal Mail sell-off but the Business Secretary said it was the best price they could get at the time.

  • The Government sold shares in Royal Mail at 330p
  • The all-time high was 618p per share
  • Royal Mail shares are currently trading at 473p

Cable: Royal Mail sale critics have benefit of hindsight

Vince Cable said MPs criticising the Government over the privatisation of Royal Mail have "the benefit of hindsight".

The Business Secretary said: "We sold at a price that was regarded as the best that could be achieved in the context in which we sold it."

"The point we have stressed ... is the price of shares is very, very volatile. These things go up and down."

"I think the wisdom of hindsight about price doesn't really help us very much."

Labour: Ministers 'botched fire sale of Royal Mail'

The Government pressed ahead with "an unnecessary and botched fire sale of Royal Mail," the shadow trade minister said.

Ian Murray said as a result of this, taxpayers "have been short changed by hundreds of millions of pounds while the Government's 'priority' City investors made a killing at the public's expense."

The Business Select Committee has claimed the Royal Mail sell-off cost taxpayers £1 billion. Credit: Dave Thompson/PA Wire

Mr Murray said: "The cross-party committee's damning report reinforces the significant criticisms which have already been made by the National Audit Office and others.

"David Cameron's Government still has serious questions to answer."

MPs: Government failed to reap Royal Mail's benefits

A select committee said they were "disturbed" that the Government may have failed to reap the benefits of privatising the Royal Mail.

The MPs said Royal Mail's assets included three sites in London valued by the Business Department at around £200 million, which the National Audit Office said possessed a "hidden value" worth £330 million to £830 million.

The Business Select Committee said taxpayers were missing out on 'significant value.' Credit: Lewis Whyld/PA Wire

The committee found the Shareholder Executive, Lazard - the Government's financial adviser - and UBS and Goldman Sachs - the Government's global co-ordinators - failed to gauge demand at higher price levels and did not give appropriate consideration to maximising value for money for the taxpayer.

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MPs claim Royal Mail sell-off cost taxpayers £1 billion

Taxpayers have lost £1 billion over Royal Mail's privatisation because the Government underestimated demand for shares, an influential group of MPs has reported.

Ministers were accused of being afraid to fail over last year's sell-off and of receiving "poor quality" advice.

The Business Select Committee said taxpayers were missing out on 'significant value.' Credit: PA Wire

In a hard-hitting report, the Business Select Committee said taxpayers were missing out on "significant value."

The advice ministers received on the sale was not up to standard, the MPs concluded.

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