The big story this week was about the sale of Royal Mail. The Opposition claimed that the public had lost £1bn as a result of a premature sale. The shares were sold for £3 but are currently selling for £5.60. The Shadow Business Secretary, Chuka Umunna, argued that a better price could have been realised if the sale had been delayed.
The big story this week was about the sale of Royal Mail. The Opposition claimed that the public had lost £1bn as a result of a premature sale. The shares were sold for £3 but are currently selling for £5.60. The Shadow Business Secretary, Chuka Umunna, argued that a better price could have been realised if the sale had been delayed. Worse still, a third of the shares had been sold to 16 big investors and half had already sold them at a profit, despite a gentleman’s agreement that this would not happen. There were dark hints that the Government was rewarding its City friends who contribute to party funds.
The Government response was the sale was necessary to give Royal Mail access to the market for the major investment needed to compete on equal terms with its private sector competitors. The sale brought £3.5bn to the Exchequer, not £1bn. A threated strike by postal workers had also been avoided and giving 10% of the shares to employees should improve its industrial relations because they now have a personal stake in the company. The postal service has been preserved and this had been achieved without the taxpayer having to prop up Royal Mail.
Business Secretary, Vince Cable, noted that previous attempts by Michael Heseltine and Peter Mandelson to sell Royal Mail had both failed. He said the sale price was based on a sample of 5000 City practitioners and professional advice from Lazards, who had no benefit from the sale. As to complaints that he had been cautious, he said he thought that was a virtue in handling public money.
Ed Miliband raised the issue again at Wednesday’s Prime Minister’s Questions and suggested that the sale was one that no-one really wanted. Why then, David Cameron responded, was the sale of Royal Mail in Labour’s 2010 manifesto?
The Government preferred to focus on the 26 million tax payers who it says will benefit from the income tax cuts coming into effect this week. Over the life of this Parliament three million, 54% of whom are women, have been taken out of income tax altogether. Anyone currently working full time on the national minimum wage will pay nearly two thirds less income tax than in 2010 and the typical tax payer should be £1,824 better off.
Finally, MPs expressed concerns that human rights legislation and an unprecedented number of legal challenges is jeopardising the effectiveness of the armed services. The European Convention on Human Rights allows foreign nationals to sue the army in UK courts. An inquiry into the conduct of British troops in Iraq had cost £22 million before being dropped. A Supreme Court judgement in 2013 allowed the relatives of dead soldiers to sue the MoD for negligence. This could undermine operational effectiveness and influence the tactics employed by field commanders. The Government is considering changing the law to protect soldiers from spurious claims in the Courts.
As Ecclesiastes observes (5:10) “whoever loves money never has enough”.