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Ed Miliband has branded David Cameron a "dunce" over his handling of the Royal Mail privatisation, prompting the Prime Minister to attack his Labour opponent as a "muppet" over his role in selling off the UK's gold stockpile.
The pair clashes in a heated Prime Minister's Questions, in which the Labour leader claimed the Government had "lost £1.4bn for the taxpayer" by undervaluing shares in Royal Mail.
As well as his attack over the sale of British gold - which took place when Gordon Brown was Chancellor - Mr Cameron claimed Labour had themselves wanted to privatise the Royal Mail.
"The truth is this. You sat in a Cabinet that wanted to privatise the Royal Mail, they couldn't do it... because the trade unions won't let them," Mr Cameron said.
The Business Secretary says he has no intention of apologising over Royal Mail shares which rose sharply in value on the day they were sold.Read the full story ›
Vince Cable has refused to apologise for the Government's handling of the Royal Mail privatisation, amid Labour claims of a "first-class disaster".
The Business Secretary clashed with his Labour opposite number, Chuka Umunna, in the House of Commons, with Mr Umunna claiming the low initial share price for the company meant investors were "laughing all the way to the bank".
But Dr Cable hit back, saying:
"The last thing I intend to do is apologise. What I do intend to do is to refer to what the report actually said as opposed to the spinning and the froth that is being generated around me."
Vince Cable has hit back at suggestions the Government mishandled the privatisation of Royal Mail.
The Business Secretary said the share offer was "done in a professional and successful way" which achieved ministers' objectives.
The National Audit Office has published a report criticising the Government over the sale of Royal Mail.
Here are some of the key figures from that report which help explain why the NAO said ministers "could have achieved better value for the taxpayer" from the share offer.
- £1.98 billion - proceeds to Treasury from sale of the Government's 60 per cent stake
- £1.704 billion - the value of the Government’s remaining 30 per cent stake
- 167,000 Royal Mail employees were given 10 per cent of the shares
- 690,000 retail investors bought shares
- 38 per cent - increase in Royal Mail share price on the company's first day of trading (October 15th, 2013)
- 72 per cent - increase in the share price over the first five months of trading
- 60p - Cost of a first class stamp at the date of the sale, an increase of 30 per cent in 2012-13.
(Source: National Audit Office)
One of the ministers involved in the privatisation of Royal Mail has insisted the Government did not short-change the taxpayer by setting the share price too low.
Business Minister Michael Fallon told Radio 4's Today programme.
I don’t think we did get it wrong. We got the issue away; this was one of the biggest privatisations for 20 years. A loss-making public corporation has now been transformed into one of the top 100 British companies.
Ten per cent of the shares are in the hands of the staff, and three quarters of a million people invested in it as well. So this was a success, and the Audit Office report actually recognises that we achieved our objectives.
Labour has hit out at the sale of Royal Mail, accusing the Government of leaving the taxpayer "disgracefully shortchanged".
Shadow business secretary Chuka Umunna said:
This report delivers a damning verdict on the Tory-led Government's botched Royal Mail fire sale, leaving the taxpayer disgracefully short changed by hundreds of millions.
At the same time, stamp prices have shot up by 30% and vital services have been put at risk at a time when families are already hit by a cost-of-living crisis.
We now know...far better value for taxpayers could have been possible had ministers adopted a different timetable for the sale.
The NAO could not be clearer: the inflexible timetable set by ministers for Royal Mail's privatisation resulted in the public losing out.
The Government has defended the sell-off of the Royal Mail in the face of a damning report into its privatisation, saying the flotation rose £2bn for the taxpayer.
BiS permanent secretary and accounting officer Martin Donnelly explained:
Our course of action was appropriate given the significant risks at the time and the fact that the alternative of a failed sale would have been the worst outcome for the taxpayer.
The sale price secured by the Government was based on a comprehensive process of preparation, in which we took extensive professional advice and consulted with more than 500 investors. We have raised almost £2bn for the taxpayers in the process.
By retaining a 30% stake in the business we have made sure taxpayers have benefited from dividend payments and will continue to benefit from share price rises after the sale.