According to this week's Private Eye, 84% of the shares in the privatised Royal Mail are already in different hands from their initial owners'. If true (and the Eye admits that it cannot identify the shareholders because only one, an offshore hedge fund, holds above the 3% necessary for disclosure), it makes a mockery of the government's strategy in privatising the organisation. The aim was to ensure that the bulk of the shares was in the hands of long-term institutional investors, as this interchange last week at BIS questions showed:
Mr Philip Hollobone (Kettering) (Con): How many and what proportion of employees of Royal Mail opted out of the allocation of free shares. [900669]
The Secretary of State for Business, Innovation and Skills (Vince Cable): Of the approximately 150,000 employees who were eligible for free employee shares, only 372 opted out of the scheme. Therefore, 99.75% of employees have accepted the shares that we offered them.
Mr Hollobone: Is not the number of posties who have opted out of the scheme remarkably low? Despite the threats of industrial action and union militancy, is it not clear that the vast majority of Royal Mail employees have accepted the invitation from Her Majesty’s Government to take part in the biggest employee share scheme of any major privatisation?
Vince Cable: Yes, it is a very positive story. The engagement of almost every employee of Royal Mail is extremely encouraging. I seem to remember that under the last Labour Government we lost in the order of 2 million working days through industrial action in every single year. This is a big change for the better.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op): May I remind the Secretary of State that before this privatisation every one of my constituents had a share in Royal Mail? It has been revealed that only a tiny number of people in most constituencies now have any shares at all and that the Prime Minister’s hedge fund friends own a lot of them.
Vince Cable: On the contrary, the share register is dominated by large long-term institutional investors, most of whom hold the savings of millions of our citizens.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC): This afternoon, I am due to meet for lunch that great Welsh export and one of the world’s best rugby players, George North. As the Secretary of State knows, George North was bought by Northampton from the mighty Scarlets at a very reasonable price during the summer. Does he think that the hedge funds feel the same as Northampton Saints, because they have acquired the Royal Mail crown jewels at a cut price?
Vince Cable: No; in fact, the offer was framed in such a way as to ensure that the shares were acquired predominantly by long-term institutional investors. A few hedge funds are involved and, indeed, some hedge funds take a long-term view.
1 comment:
Vince Cable is carrying the can alone for the shafting of the taxpayer, though it is probable that the final decision about the pitching of the offer price was made by the Treasury.
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