UK: Royal Mail sale grilling for Cable
- Credit: Eastern Daily Press � 2013
The Government’s controversial privatisation of Royal Mail will come under renewed scrutiny today when the Business Secretary will be quizzed again by MPs and the company will publish new financial results.
The coalition has been accused of selling the company too cheaply after shares soared by more than a third within minutes of the start of trading last month.
Vince Cable will face the Business Select Committee for a second time, on issues that have arisen following the flotation on the Stock Exchange.
He will be accompanied by Business Minister Michael Fallon and William Rucker, chief executive of investment bank Lazards, which gave independent advice to the Government on the sale.
Mr Cable dismissed the early gains as “froth” and said the true value of the shares would not emerge for months.
Royal Mail will reveal its first set of results as a listed company today, having returned to profit last year after four years of successive losses.
Analysts at UBS believe tough comparisons, pricing increases and a slowdown in e-commerce growth will have taken its toll on the group’s parcel arm in the half-year figures.
- 1 WATCH: 'Unplayable' delivery from Suffolk bowler goes viral
- 2 Conveyor belt which carried pig carcases across Suffolk A-road is demolished
- 3 Seven players who could leave Ipswich Town this summer
- 4 A14 westbound reopens after crash caused 7 miles of delays
- 5 Woman freed from vehicle after car overturns near to shops
- 6 Plans for 20 homes in Suffolk village unanimously refused
- 7 New landlord hopes to make Suffolk pub 'centre' of village community
- 8 Warehousing units take shape at Ipswich as demand rockets
- 9 Mercedes and Vauxhall flip over after crash in busy Ipswich road
- 10 Long delays on A14 near Ipswich after police called to hole in the road
Despite this, they still expect Royal Mail to benefit from a strong Christmas and are pencilling in a further improvement in earnings over the full-year, albeit at a more modest rate after profits more than doubled in the year to March.
The Communication Workers Union (CWU) said the Government’s excuses for “failing” to price Royal Mail correctly keep changing, but the fact remained that the sale was “bungled”.
General secretary Billy Hayes said he expected more “Cablefroth” from the minister, adding: “Hundreds of millions of pounds of taxpayers’ money have been lost because of the failure of the Government and its advisers to accurately value Royal Mail. In other situations this would be gross incompetence or even theft. Vince Cable should resign for his misjudgment in this case.
“Private shareholders have lined their pockets at the expense of the taxpayer following the huge leap in the share price. A windfall tax or some way of recouping that money should be considered. At the very least the institutions which advised the Government should not receive any further payments - which are discretionary.
“We hope the select committee will get to the bottom of who is responsible for deciding and agreeing the bargain basement sale price of Royal Mail and shed some light on what can be done to redress the situation.”
Meanwhile, talks aimed at averting strikes at the Royal Mail are to continue amid hopes of an agreement in the coming weeks.
The CWU said “significant progress” had been made in negotiations over pay, pensions and other issues.
The validity of the union’s industrial action ballot in favour of strikes will now be extended to December 3.
Dave Ward, the CWU’s deputy general secretary, said: “We understand that CWU members will be concerned about the length of time that it is taking to finalise an agreement. However, turning elements of a collective agreement into what will become a legally enforceable contract is a complicated process.
“We are confident that negotiations will conclude during this extended period and that a final agreement will soon be placed before the executive council for endorsement in the very near future.”
The union said an improved pay offer had been made, which is now being considered, while negotiations have been concluded on pensions.
The CWU will be offered “unprecedented” access to business structures and have an opportunity for “real influence” on the future direction of the company, said union officials.
The agreement will not include any commitment to binding arbitration or a no-strike deal, the CWU added.
Progress has been made on delivery workloads, but there are still “difficult areas” to resolve, said the union.
A Royal Mail spokesman said: “Royal Mail and the Communication Workers Union have made further progress in current talks on a new agreement covering industrial stability, pay and protections.
“On this basis, we have agreed to a further seven day extension of the legal validity of the current CWU industrial action ballot to allow time to conclude the discussions.”