MPs vie to put ministers in dock over sale of Royal Mail shares

Select committees queue up to attack privatisation said to have cost taxpayer £1bn

Shares in the Royal Mail rocketed 38 per cent on their first day of trading and have been 72 per cent higher than they were sold for (AFP/Getty)

Two committees of influential MPs are in a race over which of them can first publish reports rebuking the Government and its advisers over the £3.3bn privatisation of Royal Mail.

The Business, Innovation and Skills Select Committee has been investigating the sale of Royal Mail shares on the London Stock Exchange since trading started in October.

The Government has been accused of undervaluing Royal Mail, potentially costing the taxpayer billions of pounds – shares debuted at 330p each, but soon peaked at more than £6 and closed at 495p on Friday.

At hearings chaired by the Labour MP Adrian Bailey, the committee accused the Business Secretary, Vince Cable, of selling shares at “knock-down prices to the very financial institutions that you have historically criticised”.

The committee decided to wait until the authoritative National Audit Office (NAO) published its own report two weeks ago until it looked to complete its own investigation. The NAO argued that the Post Office had been undervalued by £1bn.

Those findings have encouraged the Business Select Committee to reopen its own inquiry and Mr Cable has been called to face the MPs for a third time at the end of this month. The Business minister Michael Fallon has also been recalled before them.

However, Margaret Hodge, the chairwoman of arguably Westminster’s most powerful select committee, the Public Accounts Committee (PAC), has launched her own inquiry, although there are fears that this will replicate the Business Select Committee’s work.

The former Labour minister has built a formidable reputation with her take-no-prisoners interrogation style and aggressive stance on issues such as tax, going so far as to brand Google “evil” for not paying a “fair amount” to the Exchequer,

A source close to the Business Select Committee said that it was looking to call in witnesses quickly so as to beat Ms Hodge to publishing the report. The source added: “Margaret Hodge has a very keen eye for what is in the public domain.”

Ms Hodge launched her inquiry after the NAO report, arguing that the Business department had “no clue what it was doing” and had incentivised its advisers in a way that did not encourage them to secure a good price.

She has demanded that Lazard, the Government’s main adviser, face the PAC later this month. Lazard’s chief executive, William Rucker, was hauled in front of the Business Committee in November. The PAC is then due to question the Department for Business, Innovation and Skills about the sale on 7 May.

Meanwhile, the 180-day lock-up that banned the Government from selling any of the state’s remaining stake in Royal Mail expired yesterday. Analysts and bankers do not believe any reduction in the near 30 per cent stake is imminent.