Cable faces new mail sale grilling

The Business Secretary is being recalled by a select committee of MPs to give further evidence over the Government's controversial privatisation of Royal Mail.

Business Secretary Vince Cable who is being recalled to the business select committee on April 29 to give further evidence over the privatisation of the Royal Mail
Business Secretary Vince Cable who is being recalled to the business select committee on April 29 to give further evidence over the privatisation of the Royal Mail

Vince Cable will be questioned on April 29 by the Business Select Committee, which is drawing up a report on the sell-off.

He will be accompanied by Michael Fallon, a minister in Mr Cable's Business Department.

The committee made the announcement following last week's publication of a report by spending watchdog the National Audit Office, which found that the Government could have achieved better value for money for taxpayers.

The NAO said the Business Department took a "cautious" approach, which led to shares being priced at a level "substantially below" the initial trading price, after City banks advised that investors would not pay above 330p.

Labour has asked Mr Cable to clarify a number of "unanswered" questions over last year's sell-off.

Shadow business secretary Chuka Umunna said 16 priority investors selected by the Government to buy shares should be named, as well as details given of any arrangements to make sure they would not sell their allocation, as many of them did.

Mr Umunna has also asked for correspondence between the Government and banks advising on the sale to be published.

The move followed furious exchanges in the House of Commons last week, when Labour leader Ed Miliband branded Prime Minister David Cameron "the dunce of Downing Street" for selling a majority of the company for £1.4 billion less than its current valuation.

Mr Cable said: "More than 500 would-be investors in Royal Mail were approached in the lead-up to the sale. A number of long-term institutional investors who knew the company gave us the confidence to press ahead at £3.30 but no more and were some of the larger investors on day one.

"This is standard practice for any flotation. We did not seek to lock them in as they would have paid less for a stock they could not trade. And there were no meetings between myself or officials and these priority investors."