By Tony Burke - Unite assistant general secretary
The row over the “fire sale” of the Royal Mail is igniting. Labour’s Chuka Umunna has been rightly pointing out that the valuation of the Royal Mail in the sell off is way under the real value – anywhere between £600 million and £1 billion.
The Telegraph is reporting that analysts Panmure Gordon are saying that the Royal Mail could be worth as much as £4.5 billion.
The fire sale of one of our most prized assets has attracted a scramble for cheap shares to the Tories chums in the City. Speculators could achieve a 40 per cent return on shares if sold immediately.
Irrespective of what Vince Cable has said in his letter to Umunna claiming giving ‘value for money’ to taxpayers was a key consideration in setting the price. What nonsense. The CWU and Unite warned that this would happen. It’s a ‘get rich quick scheme’ designed to raise quick cash for Chancellor Osborne.
The beneficiaries will not be the ordinary taxpayer, Royal Mail workers or the post office user. Instead the champagne corks will be popping again in City and hedge fund boardrooms, at the cash bonanza which is coming their way at the taxpayers expense.
It is not just the quick profits they can make from the undervalued shares - there are other issues which the public will take exception to.
Unite has identified a number of areas where likely investors in Royal Mail will exploit the position and demand a quick return.
Royal Mail paid little tax in the last financial last year. It paid £81 million tax and interest of which £77 million was interest. As it made £324 million profit before tax this equals only 1.2 per cent in tax. Also, according to press reports Royal Mail will pay no tax in Britain for the next five to ten years after building up a £2.8 billion backlog of tax credits.
Royal Mail has declared a number of “surplus” properties across the country and has specifically had to mention three of them. There may be many more.
There is a 14 acre site in Nine Elms, South London which has been valued in the press at between £250 million and £500 million. Part of the Mount Pleasant, London site which is said to be worth £1 billion. And the old Paddington Mail Centre, now closed, which Unite understands Transport For London/Crossrail want to buy but Royal Mail refuses to sell. No value has been put on this site but it must be worth a few bob.
Chuka Umunna has called for the ‘plug to be pulled’ on the sale – even at this late stage. However, I can’t help but think that the speculators who will make the most from this would have thought twice if Labour had made it clear that on a return to office Labour would renationalise the Royal Mail.
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