Business Secretary Vince Cable today claimed that Royal Mail remains “a fragile company”, even after a highly controversial privatisation that was designed to financially strengthen the group.
Hauled before the Business, Innovation and Skills Select Committee of MPs, Cable again had to defend accusations that the Government sold Royal Mail shares on the cheap when they were listed in London last year. The National Audit Office concluded the taxpayer lost out on about £1 billion.
In heated exchanges, committee chairman Adrian Bailey said: “Value for money for the taxpayer was a secondary interest.”
However, Cable pointed out that there was still a “very high level of volatility in the share price”, suggesting it was difficult to determine if the stock debuted too low at 330p. Royal Mail shares rose to almost 620p but were today trading at 518.5p.
Cable warned that Royal Mail was “not a blue-chip company”, and “external circumstances” could hit the share price at any time.
