Even before the exchanges at Prime
Minister’s Questions (PMQs) today, when Mil The Younger called Young Dave “the dunce of Downing Street” (Cameron
then called Miliband and “Auguste”
Balls “muppets” in return), the
National Audit Office (NAO) conclusion that the sale price for Royal Mail
shares was too low had taxed many Tories, to the extent that some spin was in order.
At first, Business Secretary Vince Cable did the defending, telling
MPs that “The last thing I intend to do
is apologise ... We've taken a loss-making public enterprise and turned it into
a successful public company”. But Royal Mail was not loss-making when it
was sold off. Indeed, operating profit in the 12 months to March 2013 had
gone from £152 million the previous year to £403 million.
Labour shadow Chuka Umunna was
unimpressed: taxpayers had been “disgracefully
shortchanged to the tune of hundreds of millions of pounds ... Those
[Cable] once referred to as spivs and
gamblers are laughing all the way to the bank”. The Guardian noted “Royal Mail
shares have soared more than 70%, trading at 565.5p on Tuesday, since their
stock market debut at 330p a share in October”.
It then dawned on the Tories that blaming Cable would look a
bit rich, given they are the senior Coalition partner: it would be admitting to
all those back benchers who claim that the Lib Dem tail is wagging the Tory dog
that they were right all along. So Dave let it be known that the sell-off was a
Jolly Good Show, and this
was duly reported by Sky News (“first
for breaking wind”).
“David Cameron said
the sale had benefited the taxpayer in three ways: it had generated money for
the country, the Royal Mail was now a ‘profit-making company paying taxes into
the Exchequer’ and Britain had a successful business”. We also got that at
PMQs – but it was already a profit-making company and was already paying taxes
into the Exchequer before being flogged off.
Would anyone like to make a pointless sacrifice on the
Government’s behalf? Step forward Douglas “Kamikaze”
Carswell to
proclaim “The NAO assumes that
because the value of Royal Mail is today 70 per cent higher than it was on the
day it was privatised, the business must have been undersold. But might it not
be that the act of privatising Royal Mail increased its value?”
But the price is predicated on Royal Mail being in the
private sector, so Carswell’s argument, such as it is, goes in a circle. The
share price has been shown to have been pitched too low. That Cameron spent
much of PMQs banging on about how 140,000 Royal Mail employees are now
shareholders is no more than a late, and lame, “look over there” gesture.
The NAO was right, and the Government wrong. An admission would be nice.
1 comment:
"“David Cameron said the sale had benefited the taxpayer in three ways: it had generated money for the country, the Royal Mail was now a ‘profit-making company paying taxes into the Exchequer’ and Britain had a successful business”. We also got that at PMQs – but it was already a profit-making company and was already paying taxes into the Exchequer before being flogged off."
He also left out that future taxpayers will have to pay off the pension fund deficit (which allowed Royal Mail to make a profit) see:
http://www.if.org.uk/archives/4280/the-privatisation-of-royal-mail-what-about-the-pension-scheme
"Or rather, he (Osborne) didn’t. What he chose to emphasise during his actual speech was that the government would be absorbing the £28 billion worth of assets held by the pension scheme, which it could use to pay down the national debt. The fact that this move also meant future taxpayers would be liable to the pension scheme’s liabilities – estimated at £37.5 billion – was (deliberately) left unsaid
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