Chuka Umunna MP, Labour’s Shadow Business Secretary, has today written to Vince Cable following reports of a ‘gentleman’s agreement’ between the government and those large investors who were given the largest stakes of Royal Mail shares, and pressing questions which remain unanswered on the privatisation of Royal Mail.

The full text of the letter is below:

The Rt Hon Vince Cable MP
Secretary of State for Business, Innovation and Skills
1 Victoria Street
London
SW1H 0ET

Wednesday 2 April 2014

Dear Vince,

In light of today’s exchange at Prime Minister’s questions, I am writing to seek clarification on a number of pressing questions which remain unanswered on the privatisation of Royal Mail.

Taxpayers have been left hugely short changed by the government’s Royal Mail fire sale, while stamp prices have gone up and vital postal services which consumers and small businesses rely on have been put at risk.

The NAO’s report this week revealed that 16 ‘priority investors’ allocated the largest stakes of Royal Mail shares - and which the government claimed would provide long-term stewardship and stability for the privatised company - sold almost half of their shares within weeks, making huge profits as a result.

It has been reported that there was a ‘gentleman’s agreement’ between the government and those large investors who were given the largest stakes of Royal Mail shares.

To provide clarity in this matter, please can you confirm:

- Who were the sixteen priority investors selected by the government, and what formal or informal arrangements were made to ensure that they would form part of a long-term and supportive shareholder base?

- Will you now publish correspondence and details of discussions between the government, the banks advising on the sale and these priority investors in the run up to the sale?

- What correspondence has there been between the government and these priority investors since Royal Mail was privatised, and will you publish it?

- What percentage of Royal Mail shares allocated to priority investors is still held by these priority investors?

I am sure you will welcome the opportunity to provide clarity on these important matters and the government’s role.

In view of the strong public interest in this issue, I am releasing this letter to the media.

Yours sincerely,

Chuka Umunna MP
Shadow Secretary of State for Business, Innovation and Skills