Royal Mail is poised to celebrate its first birthday as a public company after one of the most controversial privatisations in history.
This time last year the government achieved its aim of selling off the 500-year-old national institution, despite protests from staff, unions and politicians.
Billy Hayes, general secretary of the Communication Workers Union (CWU), which represents more than 100,000 postal workers, said: “Privatisation is about greed. I think Vince Cable is one of the cleverest men in the government, but he’s made one of the stupidest mistakes in politics on privatising Royal Mail.”
The National Audit Office ruled that the government’s desperation to sell the postal service, which traces its roots to a forerunner set up by Henry VIII in 1516, had cost taxpayers at least £750m.
The government paid £12.7m to financial institutions including Lazard, UBS, Goldman Sachs, Barclays and Merrill Lynch as well as accountants, lawyers and PR consultants for their advice on the flotation. A further £4.2m bonus, payable at the discretion of Cable, has been withheld.
Lazard, the government’s independent banking adviser, made an £8m profit by immediately selling Royal Mail stock. The investment division, Lazard Asset Management, bought 6m shares at 330p each on the day of the float but sold them within 48 hours at 470p, reaping an £8.4m profit.
Margaret Hodge, chair of the parliamentary public accounts committee, said Lazard had “made a killing at the expense of the ordinary taxpayer that lost £750m on day one” of Royal Mail’s stock market debut.