MPs summon bankers to explain their valuations of Royal Mail

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MPs investigate whether the £3.3bn sale of shares in the Royal Mail shortchanged taxpayers

Image of Royal Mail postbox
MPs investigating whether last month’s £3.3bn sale of shares in the Royal Mail shortchanged taxpayers have summoned City bankers to explain how they put a price on the near 500-year-old firm.

The Royal Mail share price has soared some 70% since 11 October when the government sold a majority stake in the postal service, prompting criticism from unions and opposition MPs that the firm was sold off too cheaply.

It was revealed after the float that four investment banks – JP Morgan, Panmure Gordon, Deutsche and Citi – believed the Royal Mail was worth far more than the price achieved. Representatives of those banks will now have to explain their valuations to the Business Innovation and Skills committee.

Goldman Sachs and UBS, which led the float on behalf of the government, will have to justify their lower valuation. Business secretary Vince Cable and a representative from Lazards will also be questioned. Hearings have been scheduled for 20 and 27 November.

At the time of their appointment a BIS spokesman said UBS and Goldmans had been selected for the sell-off work because of their past experience advising the government on Royal Mail.

How the Orange Bookers took over the Lib Dems

What Britain now has is a blue-orange coalition, with the little-known Orange Book forming the core of current Lib Dem political thinking. To understand how this disreputable arrangement has come about, we need to examine the philosophy laid out in The Orange Book: Reclaiming Liberalism, edited by David Laws (now the Chief Secretary to the Treasury) and Paul Marshall. Particularly interesting are the contributions of the Lib Dems’ present leadership.

Published in 2004, the Orange Book marked the start of the slow decline of progressive values in the Lib Dems and the gradual abandonment of social market values. It also provided the ideological standpoint around which the party’s right wing was able to coalesce and begin their march to power in the Lib Dems. What is remarkable is the failure of former SDP and Labour elements to sound warning bells about the direction the party was taking. Former Labour ministers such as Shirley Williams and Tom McNally should be ashamed of their inaction.

Clegg and his Lib Dem supporters have much in common with David Cameron and his allies in their philosophical approach and with their social liberal solutions to society’s perceived ills. The Orange Book is predicated on an abiding belief in the free market’s ability to address issues such as public healthcare, pensions, environment, globalisation, social and agricultural policy, local government and prisons.

The Lib Dem leadership seems to sit very easily in the Tory-led coalition. This is an arranged marriage between partners of a similar background and belief. Even the Tory-Whig coalition of early 1780s, although its members were from the same class, at least had fundamental political differences. Now we see a Government made up of a single elite that has previously manifested itself as two separate political parties and which is divided more by subtle shades of opinion than any profound ideological difference.


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