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  1. Business
7 October 2013updated 22 Oct 2020 3:55pm

Five questions answered on the Royal Mail sale

is it “short changing” tax payers?

By Heidi Vella

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?

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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.”

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Select and enter your email address Your weekly guide to the best writing on ideas, politics, books and culture every Saturday. The best way to sign up for The Saturday Read is via saturdayread.substack.com The New Statesman's quick and essential guide to the news and politics of the day. The best way to sign up for Morning Call is via morningcall.substack.com Our Thursday ideas newsletter, delving into philosophy, criticism, and intellectual history. The best way to sign up for The Salvo is via thesalvo.substack.com Stay up to date with NS events, subscription offers & updates. Weekly analysis of the shift to a new economy from the New Statesman's Spotlight on Policy team. The best way to sign up for The Green Transition is via spotlightonpolicy.substack.com
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  • Facility / Grounds Management and Maintenance
  • Finance Management
  • Health - Medical and Nursing Management
  • HR, Training and Organisational Development
  • Information and Communications Technology
  • Information Services, Statistics, Records, Archives
  • Infrastructure Management - Transport, Utilities
  • Legal Officers and Practitioners
  • Librarians and Library Management
  • Management
  • Marketing
  • OH&S, Risk Management
  • Operations Management
  • Planning, Policy, Strategy
  • Printing, Design, Publishing, Web
  • Projects, Programs and Advisors
  • Property, Assets and Fleet Management
  • Public Relations and Media
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Visit our privacy Policy for more information about our services, how New Statesman Media Group may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.
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