Todd Foreman, Labour's parliamentary candidate
for North East Somerset, welcomed a cross-party report by the MPs' Business,
Innovation and Skills select committee which found that taxpayers lost £1
billion in the government's privatisation of the Royal Mail.
The Royal Mail was privatised last October in an initial public offering (IPO) of its shares. Despite warnings from experts and huge demand for the shares from investors, the Government priced the shares well below what they were worth. The MPs' report comes comes on the heels of a report in April by the independent National Audit Office (NAO) which likewise found that the Government should have made more from the sale and that taxpayers have been ripped off.2
The report by the MPs' select committee found that, “the performance of Royal Mail shares points to a pricing decision that was too influenced by perceived risks and fear of failure” as opposed to getting best value for taxpayers.
Commenting on the report, Todd Foreman said:
“The recent privatisation by the Government of the Royal Mail has been a fiasco that has seen a prized state asset sold for far less than it is worth while a privileged few have made massive profits. Now a cross-party group of MPs have examined the sale and found that taxpayers have lost out to the tune of £1 billion. But rather than accept responsibility for its failure, the Government persists in claiming that taxpayers got a good deal.
“A few fat cat investors and investment banks have made hundreds of millions of profit out of the privatisation, while taxpayers have been ripped off and many small investors who wanted to participate in the IPO were left out.
It's extremely disappointing that the reaction of North East Somerset's Tory MP, Jacob Rees-Mogg, has been to defend the rip off of taxpayers. Speaking in Parliament, Rees Mogg said that the fact that Royal Mail share prices increased sharply after they were sold at an undervalue was “a sign of enormous confidence of the economic policies of Her Majesty's Government.”3
Todd Foreman added:
“In defending the “fire sale” of Royal Mail, Jacob Rees-Mogg has sided with a few wealthy fat cats who have made an enormous, quick profit at the expense of the taxpayer, rather than standing up for the interests of the vast majority of his constituents.”
Todd Foreman is a lawyer with over a decade's experience in banking and financial services and is Labour's Parliamentary candidate in North East Somerset
1See http://www.bbc.co.uk/news/business-28250963. The report can be found here: http://www.publications.parliament.uk/pa/cm201415/cmselect/cmbis/539/539.pdf
2The NAO report can be found here: http://www.nao.org.uk/report/privatisation-of-royal-mail-plc/
3Jacob Rees-Mogg made his comments in Parliament on 1 April. See http://www.publications.parliament.uk/pa/cm201314/cmhansrd/cm140401/debtext/140401-0001.htm#14040172001031.
Todd Foreman, Labour's parliamentary candidatefor North East Somerset, welcomed a cross-party report by the MPs' Business,Innovation and Skills select committee which found that taxpayers lost £1billion in the government's privatisation...