MPs Fail To Deliver Report On Royal Mail Sale

[TrueBlueTerrier]

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An influential committee of MPs has abandoned plans to publish a report on the controversial privatisation of Royal Mail because of political divisions over the subject.

Sky News has learnt that the Public Accounts Committee (PAC) has effectively decided against producing a final report owing to disagreements among members and the passage of time since the postal operator's flotation in October last year.

It is relatively unusual for a select committee to opt not to publish a report after a major inquiry.

However, a person familiar with the situation said that it had been "clear for some time" that securing the unanimous backing of the PAC's members would be "very difficult".

The Committee is chaired by Margaret Hodge, a Labour MP who has scored some notable victories during this parliament with a series of ferocious attacks on the way that multinational companies have handled their tax affairs.

Two other highly critical reports on the £3.3bn sell-off of Royal Mail have already been published this year.

The National Audit Office and Business, Innovation and Skills select committee both accused the Government of costing taxpayers hundreds of millions of pounds by undervaluing Royal Mail's shares last year.

An initial surge in the company's share price saw them almost double during the ensuing three months, but a combination of the UK regulatory framework, an investigation by French authorities and the growing impact of greater competition have weighed on Royal Mail during the second half of the year.

On Friday, they were trading at just over 416p, down 25% during the last 12 months, although still just over 25% higher than the price at which they floated.

Taxpayers continue to own 30% of Royal Mail, but Vince Cable, the Business Secretary, signalled this week that that shareholding would not be sold ahead of next year's General Election.

Some of the most intense questioning of Mr Cable about Royal Mail came during the PAC inquiry in April.

Royal Mail's chief executive, Moya Greene, was back in parliament this week when she appeared alongside rivals to discuss the universal service obligation with members of the BIS Committee.

Ms Greene argued that the USO - which obliges Royal Mail to deliver to every UK address for the price of a stamp - may be unsustainable in its current form because the existing regulatory framework allows rivals to cherry-pick more profitable delivery areas.

A PAC spokeswoman confirmed that there were "no plans" to publish a report on Royal Mail's privatisation.

[Cyclopz]

Obviously because the report would be very embarrassing for the government and their backers in the sale.