£180m lost by Royal Mail sale

18 December 2014

Royal Mail The sale of the Royal Mail is already a controversial topic. It won't be letting up any time soon as reports show that UK taxpayers lost out £180m on the deal. A small mercy is that it was originally thought to be a much greater loss, somewhere in the region of £1bn.

However, £180m is no joking matter.

The inquiry headed by Lord Myners will conclude this week and will show that the Government could have received additional proceeds of somewhere between £120m and £180m if the sale of shares had been conducted properly.

The report will also underline the inadequacies in the way that the Shareholder Executive (who looks after state-owned assets) handled the privatisation. It adds that, based on initial interest from investors, the price range for the shares should have been higher.

Vince Cable, who commissioned Myners to complete the inquiry, asked him to examine whether the way future Government asset sales should be changed.

The inquiry are set to make a number of recommendations, including measures to overhaul conventional market practices, like the earlier publication of prospectuses which will facilitate better investor education and enabling a greater number of analysts to publish research on companies and the like.

There will also be calls for an examination of whether or not there should be standardised shareholding disclosure requirements for all institutions. This will mean a lot of changes in the market and a shake-up of the way things are done between regulators and institutional investors.

TOPICS:   Tax

3 comments

  • David
    Royal Mail was a hotbed of "industrial activity". Like the operation run by Red Robbo at Austin Rover. The only thing that saved Royal Mail was the need to post and deliver letters etc. Now we have loads of Royal Mail competitors who offer a better service at low lost. Like Hermes. Thankfully, the country could ditch Austin Rover in favour of foreign cars built by benign foreign workers. Unfortunately now, we've got similarly powerful trade leaders such as those who lead the Tube and Rail Unions. There are no powerful unions in manufacturing industry because industry faces competition from overseas.
  • Gas M.
    Let's blame the migrants for this, seeing as they blame for everything else
  • Martin
    The thing that saved Royal Mail is also the thing that is screwing it over. They don't make enough money from postage to run the normal system. Get a courier to send a letter to Edinburgh the next day for the price of a first class stamp. They won't. I do think it's weird they say it's a loss to the taxpayer though. You could stretch that out more and more in either direction depending on where you look at it. You just don't know what might have happened if it was an extra pound for instance. Or at what point is it a loss if the share price plummets after some problem. Is that a potential profit as they gained more money from the shares than they are worth now?

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