Five questions answered on the Royal Mail sale

is it “short changing” tax payers?

Shadow business secretary Chuka Umunna has said privatisation of the Royal Mail undervalues the company. We answer five questions on Umunna’s Royal Mail comments.

By how much does the Shadow Secretary think Royal Mail is being undervalued by?

Umunna said on BBC Radio 4's Today programme he thinks the privatisation of the Royal Mail undervalues the company by as much as £1bn, with City investors and hedge funds being the biggest beneficiaries of the sale.

He added that the sale is “short changing” tax payers.

When is the Royal Mail being sold?

Shares of Royal Mail will be sold to the public from 15 October. Up to 62 per cent of the business will be sold, with the rest remaining state-owned. A 10 per cent stake has been reserved for Royal Mail employees.

A £750 minimum purchase stake is required by members of the public and a £500 minimum purchase stake by employees.

What else has Ununna said?

He believes the £750 minimum purchase stake is too steep for the public.

"That is a lot of money for most people - it is out of reach for many. Most of the people benefiting from this will be the speculators and the hedge funds,” he told Radio 4.

Labour has said they will not renationalise the Royal Mail if the party got in power at the next election.

What is the current value of the Royal Mail shares?

Initially the government priced the shares at 260-330p, but it is thought they will be sold between 300-330p.

On Friday it was reported that demand for shares is outstripping supply.

What has the government said in regards to the Shadow Business Secretary’s comments?

The Department for Business said: "This is a commercial transaction and government is following normal commercial practice in setting and publicising the share price and delivering value for the taxpayer. The value of Royal Mail will depend on a number of factors, notably the company's on-going financial performance, its future prospects and the level of investor interest."

Photograph: Getty Images

Heidi Vella is a features writer for Nridigital.com

Photo: Getty
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Who will win in Manchester Gorton?

Will Labour lose in Manchester Gorton?

The death of Gerald Kaufman will trigger a by-election in his Manchester Gorton seat, which has been Labour-held since 1935.

Coming so soon after the disappointing results in Copeland – where the seat was lost to the Tories – and Stoke – where the party lost vote share – some overly excitable commentators are talking up the possibility of an upset in the Manchester seat.

But Gorton is very different to Stoke-on-Trent and to Copeland. The Labour lead is 56 points, compared to 16.5 points in Stoke-on-Trent and 6.5 points in Copeland. (As I’ve written before and will doubtless write again, it’s much more instructive to talk about vote share rather than vote numbers in British elections. Most of the country tends to vote in the same way even if they vote at different volumes.)

That 47 per cent of the seat's residents come from a non-white background and that the Labour party holds every council seat in the constituency only adds to the party's strong position here. 

But that doesn’t mean that there is no interest to be had in the contest at all. That the seat voted heavily to remain in the European Union – around 65 per cent according to Chris Hanretty’s estimates – will provide a glimmer of hope to the Liberal Democrats that they can finish a strong second, as they did consistently from 1992 to 2010, before slumping to fifth in 2015.

How they do in second place will inform how jittery Labour MPs with smaller majorities and a history of Liberal Democrat activity are about Labour’s embrace of Brexit.

They also have a narrow chance of becoming competitive should Labour’s selection turn acrimonious. The seat has been in special measures since 2004, which means the selection will be run by the party’s national executive committee, though several local candidates are tipped to run, with Afzal Khan,  a local MEP, and Julie Reid, a local councillor, both expected to run for the vacant seats.

It’s highly unlikely but if the selection occurs in a way that irritates the local party or provokes serious local in-fighting, you can just about see how the Liberal Democrats give everyone a surprise. But it’s about as likely as the United States men landing on Mars any time soon – plausible, but far-fetched. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.