Osborne should discount RM shares for retail investors

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Osborne should discount Royal Mail shares for retail investors when the rest of our post floats

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Royal Mail’s privatisation two years ago captured the public’s imagination in the way that the great privatisations of Margaret Thatcher’s era – British Gas, British Airways and British Telecom – certainly did.

George Osborne would do well to remember that these huge asset sales were presented as the essence of ‘popular capitalism’, a way of allowing ordinary people to share in the financial fruits of privatisation.

Though their rivals took a different point of view, it was the Tories’ take which triumphed with the public – even Labour looked at privatising the Royal Mail and it was a Liberal Democrat, Vince Cable, who actually did it.

So if this newly elected administration really wants to make itself the Government of working people, Osborne should make a discounted offer to retail investors when he sells the Government’s final 30 per cent stake in Royal Mail.

Of course, it was effectively a discounted offer last time when the Coalition offered Royal Mail shares for sale at 330p each, before watching them rise 38 per cent in the first day.


Cable – then Business Secretary – was accused by the National Audit Office of selling them off far too cheaply losing taxpayers millions in the process.

The shares stood at 525p when Osborne made his announcement last week. A discounted offer would be contrary to the stipulations of a free market, but selling the Government’s final stake in a previously publicly owned institution is a highly political act and wooing the public with a discounted offer makes sense politically.

The CWU postal workers’ union opposes the sale, claiming privatisation always means ‘a race to the bottom’. Royal Mail’s new chairman, Peter Long, would surely beg to differ.

The time has come: If this newly elected administration really wants to make itself the Government of working people, Osborne should make a discounted offer to retail investors, says Jon Rees

He will be paid £300,000 annually compared with the £230,000 a year collected by his predecessor Donald Brydon. It’s a long way from the average annual pay of postal workers, which is just over £20,000.

You have to admire the sheer nerve of Sir Martin Sorrell of advertising group WPP. On Tuesday, he will face investors as they vote on his pay packet at WPP’s annual general meeting.

And what a pay packet it is: Sorrell has trousered a cool £43million (the vote is retrospective – he already has the money). Included in his package is £274,000 to pay for his wife to accompany him on business trips. Why his clients don’t ask for their fees to be cut is beyond me.

There’s a new chairman coming in at WPP, Roberto Quarta. He should make his mark by curbing the potential for excess in his rhino-skinned chief executive.