By Richard Johnstone | 10 January 2014
Labour has reiterated claims that the government’s privatisation of the Royal Mail short-changed taxpayers by hundreds of millions of pounds after the share price for the company rose by more than 70% following the sell-off.
Marking three months since the shares were first offered, shadow business secretary Chuka Umunna said today the value of shares – which stood at 562p at market close on Wednesday – showed the firm had been undervalued. Shares were sold at 330p each at privatisation on October 11, but climbed above 500p later that month and has not fallen below that mark since.
Umunna highlighted that in interviews at the time of the sale, Business Secretary Vince Cable said the sale price should not be judged until three months on from the flotation.
‘Three months later, the business secretary’s dismissal of the sharp rise in share price as “froth” has been demolished and increasingly it looks like the taxpayer has been left short changed at a time when services are being cut and families are struggling with David Cameron’s cost of living crisis,’ Umunna said.
‘He still has serious outstanding questions to answer on the price he could have received three months ago in respect of what increasingly looks like a botched privatisation.’
Umunna has already written to both the National Audit Office and the Public Accounts Committee asking them to examine the deal.
