Royal Mail
Debate between Viscount Younger of Leckie and Lord Dykes
Viscount Younger of Leckie
First, I do not agree with the first comment that the noble Lord made. He also made reference to a fire sale. I think it was said at the time, in October—I think by me—that this would be the longest fire sale in history, because my noble friend Lord Heseltine had mooted the idea of an IPO of Royal Mail many years ago. Indeed, the Benches opposite will know of the input into this from the noble Lord, Lord Mandelson. The National Audit Office report was not devastating but said that many of the decisions that we took were good; it said that we were right to be cautious and that it would have been wrong to take risks with such an important public asset as Royal Mail, or even to take risks with taxpayers’ money that would have been needed to support the company in continued public ownership. Had we adopted a more aggressive approach to pricing, there was a real risk that the deal would have failed. As the NAO says, the Royal Mail under public ownership would be worth much less than the sale proceeds.
Lord Dykes (LD)
I declare an interest as a small shareholder and ask for the Government’s view on the need to restore some of the quality of the longer-term institutional shareholders. In view of what has happened in the short-term transactions, would the Government consider the merits of holding on to their 30% stake longer than originally intended?
Viscount Younger of Leckie
In terms of holding on to stakes, it is good to note that at least 50% of the original institutional investors have retained their investment, which shows an element of consistency. I point out again that nearly 700,000 retail investors took up the offer and employees took up 10% of the offer. To that extent, it has been a success.