April 1 - Britain's public spending watchdog says the government's cautious approach to last year's sell-off of state postal group Royal Mail has led to a sale price that has short-changed the taxpayer. Sonia Legg reports
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It was always going to be a controversial sell-off.
But six months after the UK government off-loaded a 60% stake in the world's oldest postal service it's still being criticised.
Shares in Royal Mail rose 38% on the day they were offered - they've now risen as much as 87%.
Margaret Hodge is chair of the committee which monitors public spending.
(SOUNDBITE) (English): Margaret Hodge, Chair, Public Accounts Committee, saying:
"All the benefits went to the shareholders - far too little money went to the tax payers - in fact taxpayers lost out to the tune of nearly three quarters of a billion pounds - that's a sale but it's a sale at any price."
She says other mistakes were also made - including allowing Royal Mail to keep valuable real estate in central London while taking on costly pension liabilites.
Business Secretary Vince Cable .
(SOUNDBITE) (English): Vince Cable, Business Secretary, saying:
"The government approached this cautiously - that's the word they used - because we did not want to run the risk that the whole sale could flop. If the whole sale had flopped there would be much bigger liabilities for tax payers than has actually happened."
Several banks valued Royal Mail higher than the 330 pence offer price.
But Robert Cole from Reuters BreakingViews says the health of the postal service has improved significantly in recent months - as has the market.
(SOUNDBITE) (English): Robert Cole, reuters BreakiingViews, saying:
"It is undeniable that the shares were sold too cheaply but at the same time while I might put a higher value on this company now as I did then I still think these shares are riding for a fall."
The report accepts a failed sale could have jeopardised the future of Royal Mail.
And the new capital is being put to good use.
Royal Mail is shifting focus from letters to parcels.
It's also cutting 1,300 jobs in a bid to delivery value for money to its new shareholders - that still includes the government which retains a 30% stake in the service.
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