Cable claimed publicly owned Royal Mail was a sinking ship – but profits DOUBLED in six months before sell-off
Royal Mail's profits nearly doubled to £283 million in the six months before it was sold off - showing that it was clearly a public-sector success and fuelling accusations that the national treasure was sold off on the cheap.
Shares were initially flogged off for £3.30 but were trading at £5.68 yesterday.
Business select committee MPs laid into Mr Cable for grossly undervaluing the Royal Mail.
And postal workers' union CWU said the figures showed clearly that it should have been kept in public hands.
"These results are based on performance when Royal Mail was still in public ownership," said general secretary Billy Hayes.
"The rise in profits is further proof that there was no need to privatise this successful company.
"A profitable, successful and well-loved institution was flogged on the cheap when these latest figures show it was healthy and in good hands.
"The government's arguments continue to crumble. These profits should be public money, not paid out to hedge funds and city institutions in dividends."
Meanwhile the Unite union, which represents 7,000 Royal Mail managers, said the coalition had "hoodwinked" the public by claiming that Royal Mail was not a viable business.
"It is clear that the chickens are coming home to roost very quickly for Vince Cable and he has spectacularly failed the UK taxpayer," Unite officer Brian Scott said.
"Ministers alleged, wrongly as it has turned out, that the Royal Mail couldn't operate successfully in the public sector which was why it needed to be sold off at what was a bargain-basement price.
"Today's profit figures highlight how the taxpayer has been hoodwinked by that spurious argument and sold down the river.
"The loser is the UK taxpayer as the Royal Mail was a viable business before the sell off - and now money that should be flowing into the Treasury for schools and hospitals is going into the pockets of private investors.
"Services and staff were slimmed down so that profits could be fattened up for the sell-off."
Mr Cable attempted to defend the privatisation at the select committee, "categorically" rejecting claims that taxpayers had lost out and assuring that it would take time for the share price to settle down despite it breaking the 500p mark within a week.
He was grilled by committee chairman Adrian Bailey, Labour MP for West Bromwich West, about the advice given to the government by banks which later made a killing on the shares.
Mr Bailey asked: "It begs the question, what was their motivation? Were they conning you, putting it bluntly?"
Morning Star
