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Royal Mail Shares

Volume 574: debated on Thursday 23 January 2014

4. What assessment he has made of the value for money achieved for the public purse through the recent sale of shares in Royal Mail. (902132)

Unfortunately not. It is perfectly reasonable for the Minister of State to seek to do so, but the attempted grouping falls because I fear that the hon. Member for Derby North (Chris Williamson) is not present in the Chamber.

I was hoping there would be some interest in this question.

We believe that value for money should be assessed over the long term and should consider not merely the proceeds from the initial sale but the value of the taxpayer’s retained stake in Royal Mail and the reduced risk to the taxpayer and the six-day-a-week universal service of a stable company with access now to private capital.

Given the botched and imprudent sale of the first tranche of Royal Mail shares by this Government at the expense of taxpayers, the public will be concerned about the emerging reports that the Government intend to sell off the remaining family silver before the next election. Will the Minister confirm whether those reports are accurate?

I can confirm, first, that the sale of Royal Mail was a success. Unlike the hon. Gentleman, I am delighted that the shares have risen in value, reflecting Royal Mail’s interim trading results and the long-overdue agreement with the union. Any decision on a sale of the remaining stake is still to be taken.

One of the hidden values for money is the fact that of the 150,000 eligible hard-working postmen and women who could take up their free allocation, only 368 said no. That means that as the company goes from strength to strength, those who directly work for Royal Mail will now financially benefit from that. Is not that a very good thing?

Yes. I would have thought that Labour Members would welcome this extension of employee share ownership. I am delighted that 99% of Royal Mail’s employees took up the offer and now have a stake in the success of that company as it moves forward.

As my hon. Friend the Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) said, the fire sale of Royal Mail has cost the taxpayer in excess of £750 million, but it has not taken it long to enjoy its new privatised status. Reports in the media suggest that the board of Royal Mail is about to propose a significant pay increase for the chief executive to bring her in line with those in other FTSE 100 companies. The Business Secretary says that he will use the Government’s remaining stake as the largest stakeholder to veto the proposals. Does the Minister agree with the Secretary of State, his boss, or is this just froth?

If this were a fire sale, it would certainly, as my hon. Friend the Member for Gainsborough (Sir Edward Leigh) has said, be one of the longest fire sales in history, given that Governments have been trying to sell Royal Mail for over 20 years. I think we should salute Moya Greene’s achievement in transforming a loss-making public corporation into one of Britain’s top 100 companies and congratulate her, as one of all too few female chief executives, on her award as business person of the year. We have yet to receive any proposal from the remuneration committee.

When I last visited Stroud sorting office just before Christmas, I noticed that the much-needed modernisation programme was being started. Does the Minister agree that that has been made possible by the sale of shares and that it represents a Government success?

Yes. The purpose of the sale was to enable Royal Mail to have access to private capital so that it would not be dependent on the taxpayer for ensuring the successful delivery of the six-day-a-week universal service on which we and all our constituents rely.