British PM under pressure over Royal Mail sell-off

2014-04-02 16:29
(Picture: AFP)

(Picture: AFP)

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London - British Prime Minister David Cameron came under pressure in parliament on Wednesday over his government's sale of Royal Mail with the opposition Labour party accusing him of selling the firm off too cheaply to a handful of rich London investors.

The government's handling of the sale of a 60% stake in the 500-year-old state postal operator last October at 330 pence a share has come under renewed scrutiny after the country's spending watchdog concluded the government had set the price too low.

Labour has seized upon the flotation, and the quick profits made by big banks and City investors, to reinforce one of its central arguments ahead of next year's general election - that Cameron's government is out of touch with ordinary voters.

"He sold at 330 pence and this morning the price was 563 pence," Ed Miliband, Labour's leader, told parliament. "It is basic maths. Not so much the Wolf of Wall Street more the dunce of Downing Street," he quipped, referring to the street where Cameron has his office.

Fortune for few

"A third of the shares were sold to just 16 city investors and there was a gentleman's agreement that those city investors wouldn't sell the shares," Miliband said.

"What happened? Within weeks half of those shares had been sold and they had made a killing worth hundreds of millions of pounds. In other words 'mates rates' for his friends in the City. This is a sale nobody wanted and nobody voted for - a national asset sold at a knock-down price to make a fortune for the few."

The government has refused to apologise for its handling of the sale and Cameron said on Wednesday the float had raised 2 billion pound for the British taxpayer and created a successful listed company.

"There are now 140 000 shareholders working for the Royal Mail, there are almost three quarters of a million members of the public with shares, these are signs for celebration," Cameron told parliament.

"I will take a lecture from almost anyone in the country about the sale of Royal Mail but not from the two muppets who advised the last chancellor not to sell it at all," he said, referring to Miliband and Ed Balls, Labour's financial spokesperson.

Read more on:    royal mail

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