The Government faces some awkward questions over RM

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The Government faces some awkward questions over the Royal Mail privatisation http://blogs.telegraph.co.uk/news/james ... atisation/" onclick="window.open(this.href);return false;

The remarkable popularity of shares in Royal Mail appears to have left ministers in something of a quandary. Having earmarked only 30 per cent of the equity for retail investors, how to slice that stake between the 700,000 private individuals who applied?
As we report this morning, a likely option is that retail investors who made the largest bids will miss out completely. So someone who asked for, say, £40,000 of shares will get nothing. This will ensure that smaller bidders, who might have applied for, say, £750 worth, get roughly what they asked for.

You can see the thinking here: make sure that “ordinary” folk – described here with no little condescension as Mrs Miggins – get to share in the float, while fat-cat “professional investors” don’t get to cash in.

But that raises awkward questions. First, just how does HMG propose to differentiate between deserving and undeserving retail investors? Are we now to understand that ministers believe that some people seeking to profit from Royal Mail are good and others bad? That sounds suspiciously reminiscent of Ed Miliband’s predators-vs-producers view of good companies and bad companies, a moral schema which – I had thought – the Coalition had firmly rejected.

And if ministers are now going to differentiate between saintly ordinary investors and sinful speculators, how do they propose to justify a flotation were 70 per cent of shares are reserved for institutional investors, a group not often regarded as either saintly or ordinary? Is a private citizen who has saved enough to be able to invest £40,000 in Royal Mail shares really less deserving than hedge funds and investment banks?

Something tells me ministers are going to need a very good answer to that question.