Business Secretary Vince Cable said judgment should be passed on the sale price of Royal Mail three months after its flotation. Three months on, the evidence still suggests taxpayers could have been short changed to the tune of hundreds of millions of pounds by the Tory-led Government’s sell-off.

Interviewed on the Today Programme on the day Royal Mail privatisation took place in October, Vince Cable dismissed the jump in the price of Royal Mail shares as “froth” and said the sale price should be judged three months after its privatisation.

Royal Mail’s share price closed on Wednesday at 562p, more than 70 per cent higher than the 330p price at which David Cameron’s Government sold the taxpayers’ stake. The price has remained above 500p since October.

Following this dramatic rise in Royal Mail’s share price, last month it was listed on the FTSE 100. As well as an inquiry by the BIS Select Committee, Vince Cable faces probes on the Royal Mail fire sale from the National Audit Office and the Public Accounts Committee.

Chuka Umunna MP, Labour’s Shadow Business Secretary, said:

“On the day the Royal Mail fire sale went ahead Vince Cable was clear that the Tory-led Government should be judged on the basis of the price of Royal Mail shares after three months.

“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.

“We know that Vince Cable considered, then rejected, the option of floating Royal Mail at a higher price which would have brought in more cash for taxpayers. He still has serious outstanding questions to answer on the price he could have received three months ago in respect of what increasingly looks like a botched privatisation.”

Vince Cable, interviewed on the Today Programme on Friday 11 October said:

“You get an enormous amount of froth and speculation in the aftermath of a big IPO of this kind. It is of absolutely no significance whatever. What matters is where the price eventually settles and if we look back at this in three months’, six months’ time, or indeed years to come, that’s what we’re really interested in.”
Vince Cable, BBC Radio 4 Today Programme, 11 October 2013