The CWU backed the Business, Innovation and Skills select committee report released today (Friday) which stated “the taxpayer has missed out on significant value” because of the botched sale of Royal Mail.
The report highlighted that the government “over-emphasised the risk” of potential strike action which was threatened by the CWU last summer. It continued: “The share price, during and after the union’s acceptance of a pay deal demonstrates that industrial relations were less of an issue for the market than they were for Government.”
“This damning report shows the extent of the government’s incompetence in the privatisation of Royal Mail” Said Billy Hayes, CWU general secretary
The report also points out that many investors were keen to buy shares at a much higher price than was originally offered, which shows that the demand for shares would not have disappeared at a higher offer price.
The report was published in the wake of Business Secretary’s Vince Cable announcement yesterday for a review of government initial public offerings.
CWU general secretary, Billy Hayes, said: “The BIS select committee’s damning report published today shows the extent of the government’s incompetence in the privatisation of Royal Mail. The Committee rightly dismissed the Business Secretary’s assertion that an increase in Royal Mail’s share price was ‘froth’. The only froth came from Vince Cable and Michael Fallon’s allegations that threat of strike action from the CWU last summer affected the share price, which the committee said was ‘over-emphasised’.
“This is the second report which has exposed the government’s bungling of the privatisation of Royal Mail as a political opportunity. Both the National Audit Office’s report earlier this year and today’s BIS select committee report stated that shares were grossly undersold, losing taxpayers hundreds of millions of pounds.
“Cable’s announcement yesterday to review the privatisation process of national assets is a cynical attempt at damage limitation. Surely the bodged job the government did on the privatisation of Royal Mail is a lesson in itself – leave the family silver where it is instead of pawning it off.”
Report submitted by Andy Beeby, Political Officer, CWU Eastern 5