SKETCH: So How Many Royal Mail Shares Did Labour Buy?

Years ago, I felt a British decline in my bones, and an imminent currency collapse – lo, it came to pass.

Sterling almost went to parity with the US dollar and I said, with triumph, to a banker friend, “I knew that was going to happen.” He looked at me with admiration, “So, how much did you make?”

“Oh, I didn’t.”

Then what contempt! “So, you didn’t know,” he said, witheringly.

When Labour denounce Cable and Fallon for selling the Royal Mail too cheaply, at a knocked-down price, on firesale terms, with a guaranteed profit built-in – it is worth asking how many shares they bought?

Chuka told the Commons this afternoon that the Government could easily have got hundreds of millions more – it does beg the question, did he tell his investment planners, his analysts and brokers to put in for the maximum allocation? He could have donated the guaranteed, safe-as-houses profit to Labour’s election campaign.

Vince didn’t do as badly as Labour might have hoped. He had a neat answer as to why so many “long-term investors” got out so quickly. “They considered the price after the sale was over-valued.”

Some quiet, admiring laughter. Some yelps.

His other defence was Labour’s record in selling Qinetiq. That went for £125m, the civil servants and advisers got £107m, and the company was promptly valued at over 10 times the initial offering: £1.3bn.

There is much to jeer at in the Royal Mail sale, and much to criticize, no doubt. But it’s not absolutely clear that Cable and Fallon would, in China, be hanged as economic criminals.

What it does show is the constitutional inability of politicians to get the best price for assets. They’re not set up for it. The incentives are all wrong.

And poor old Vince. Now that the share price has doubled, he looks like another Tory fall-guy. His privatization of Royal Mail bookends a career that started by introducing £9,000 tuition fees. He has turned out to be a good punchline for the best Tory jokes.

What will they make him do next? Tax food banks? Make people pay for their own disability assessments? Charge for Employment Tribunal actions? Make people pay for A&E! He really deserves to go out on a high.




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Quote of the Day

The FT’s Wolfgang Munchau on the “fake maths” of economic forecasts:

“The truth is that our ability to forecast the future beyond the current quarter is limited… The curse of our time is fake maths. Think of it as fake news for numerically literate intellectuals: it is the abuse of statistics and economic models to peddle one’s own political prejudice… The fakeness of the maths lies in an exaggerated inference. Economic models have their uses, as do opinion polls. They provide information to policymakers and markets. But nobody can see through the fog of the future.”

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