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Royal Mail

Oral Answers to Questions — Business, Innovation and Skills – in the House of Commons at 9:30 am on 10th April 2014.

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Photo of Karl Turner Karl Turner Opposition Assistant Whip (Commons) 9:30 am, 10th April 2014

What assessment he has made of the value for money for the public purse of the recent sale of shares in Royal Mail.

Photo of Jessica Morden Jessica Morden Labour, Newport East

What assessment he has made of the value for money for the public purse of the recent sale of shares in Royal Mail.

Photo of Michael Fallon Michael Fallon The Minister of State, Department for Business, Innovation and Skills , Minister of State, Department of Energy and Climate Change, Minister of State for Portsmouth

The National Audit Office’s report on the Royal Mail share sale published last week confirms that we achieved our key objective of achieving the sale and allowing Royal Mail access to the private capital it needs to invest and thrive. It was a successful transaction, raising £2 billion for the Exchequer, and has reduced the risks to the taxpayer of having to provide future financial support to the universal six-day-a-week service.

Photo of Karl Turner Karl Turner Opposition Assistant Whip (Commons)

The Secretary of State recently described me as “tribal” for my opposition to the fire sale of the Royal Mail. What does the Minister say about Peter Davies of Lansdowne Partners, the Chancellor’s best man and best pal, who is set to rake in millions from this dodgy deal? Will he say how many of the 12 lucky immediate winners are Tory party donors?

Photo of Michael Fallon Michael Fallon The Minister of State, Department for Business, Innovation and Skills , Minister of State, Department of Energy and Climate Change, Minister of State for Portsmouth

More than half the shares allocated to priority investors are still held by those investors, and six of them remain among Royal Mail’s largest shareholders.

Photo of Jessica Morden Jessica Morden Labour, Newport East

Most people listening to the Minister’s response will think that it was particularly lame, to put it mildly. Can he justify the fact that consumers and businesses have faced hikes of up to 30% in stamp prices, while hundreds of millions of pounds have been squandered because of the Secretary of State’s disastrous decision at a time when families are really struggling?

Photo of Michael Fallon Michael Fallon The Minister of State, Department for Business, Innovation and Skills , Minister of State, Department of Energy and Climate Change, Minister of State for Portsmouth

Nobody has lost anything. Britain has gained a top-100 company in which 10% of the shares are owned by the staff themselves. Nearly three quarters of a million individual investors also have shares in Royal Mail. We achieved our objective of realising nearly £2 billion of receipts for the Exchequer, ensuring that Royal Mail has been put on a sound commercial footing.

Photo of Ian Murray Ian Murray Shadow Minister (Business, Innovation and Skills)

The Minister can spin this as much as he likes, but he shamefully lost the taxpayer £750 million from the sale of Royal Mail. At that time, the Business Secretary dismissed the loss, saying:

“We wanted to make sure that the company started its new life with a core of high-quality investors who would be there in good times and bad”.

Given that the core long-term investors that the Business Secretary championed have used the good times to sell the majority of their shares at huge profit, is it not right that the Government tell us who those priority investors are, so that the taxpayers know where their lost millions went?

Photo of Michael Fallon Michael Fallon The Minister of State, Department for Business, Innovation and Skills , Minister of State, Department of Energy and Climate Change, Minister of State for Portsmouth

Nobody has lost anything from the sale of Royal Mail. More than half the shares allocated to priority investors remain with those investors, and the share price has fluctuated wildly. I do not think the hon. Gentleman has been in touch with his broker recently, otherwise he would know that the share price closed last night at 17% down on its post-float peak.