Government ‘Short-changed’ public over Royal Mail privatisation

Government ‘Short-changed’ public over Royal Mail privatisation

A report commissioned by Business Secretary Vince Cable has revealed that the government made £180m less from the £2bn sale of Royal Mail than it could have, according to the BBC online. It says shares could have been valued up to 30p more than the flotation price of 330p because of the high level of demand from banks and individuals.

However, former City minister Lord Myners, who led the report, said this would have involved “substantial” risk.

MPs have suggested taxpayers lost out by £1bn in the 2013 privatisation.

But the report calculates the untapped potential revenue to be lower than that.

Lord Myners was keen to stress that pricing a share sale is a difficult process. Speaking on BBC Breakfast, he said it was a “complicated transaction” and that “if any money had been left on the table it was pretty small”.

He said that lessons could be learned about how to make the process less complicated.

The probe was ordered by Mr Cable after a National Audit Office review into the privatisation of Royal Mail said too much emphasis was put on rushing the sale – the initial public offering (IPO) – at the expense of value for money.

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