Royal Mail shares: the questions Vince Cable must answer

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What the House of Commons committee needs to ask of the business secretary as he explains the price of the selloff


Vince Cable will defend the pricing of Royal Mail shares in front of a Commons committee on Wednesday. Here are a few questions the MPs should ask the business secretary about the privatisation process:

1 Do you think it would have been possible to sell the shares above the 330p maximum price in the advertised range? Given the requirement to achieve value for money for taxpayers, was this option assessed once the strength of demand from would-be buyers became clear?

Was Lazards, adviser to the government, asked to give an opinion? If so, what did it say?

2 Why was the upper limit of the price range set at 330p in the first place? How was that figure established?

3 What premium above the IPO price – whether achieved after a day, a week or a month of trading – would you regard as evidence of under-pricing to the detriment of the public pursue? Would 10%, 15% or 20% qualify?

4 What did you mean when you said one consideration in the sale was "ensuring that ownership of the Royal Mail moves smoothly to responsible investors able to take a long-term, responsible approach to owning the company?"

Have irresponsible investors been disqualified from applying for shares? If so, how?

5 About 30% of the shares on offer were initially ear-marked for private investors. Can this proportion now be increased if there is sufficient demand?