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Labour slams 8220 botched 8221 Royal Mail share sale

Article By: ,  Financial Analyst
January 10, 2014 10:15 AM

The Labour Party has spoken out again about the privatisation of Royal Mail, claiming that the share sale by the government was "botched".

Shadow business secretary Chuka Umunna pointed out that the share price of the firm has been consistently above the 500.00 mark since stocks were made available to buy last year.

Labour noted that this is 70 per cent higher than the original price of 330.00, but the government has denied that the firm was undervalued and that stocks were sold off too cheaply.

"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," said Mr Umunna.

Government failure

He noted how his opposite number, business secretary Vince Cable, thought about floating Royal Mail at a higher price which would have brought in more cash for taxpayers only to reject the idea in the weeks leading up to the privatisation of the company.

Mr Umunna claimed Mr Cable still has a number of questions to answer regarding the Royal Mail share sale in the autumn, adding that the government has "botched" the privatisation.

Billy Hayes, general secretary of the Communication Workers Union, stated that taxpayers have been left with a "bad taste" in their mouths as a result of the share sale of Royal Mail. He added: "The British public were against the sale of this great public service as consumers and now they know for sure they got a bad deal as taxpayers too."

But the government has consistently denied that it could have sold Royal Mail off for a higher price and an independent report said the coalition chose the right moment to privatise the firm.

The share price of Royal Mail is up in the early stages of trading this morning (January 10th), rising by 0.71 per cent by 08:18 GMT. Stocks are currently selling for 565.00, close to a new record high for the company, with the 52-week peak set at 607.00.

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