Cable denies being currency mole as he defends Royal Mail sell-off


  By a Newsnet reporter
UK Business Secretary Vince Cable today defended the way the coalition government handled the privatisation of Royal Mail, amid criticisms from an independent parliamentary body that the deal was rushed at the expense of value for money.
The National Audit Office (NAO) report said the half-a-millennium old institution was undervalued and the decision to plough ahead with the sale cost taxpayers £750m in a single day.  Royal Mail shares are now more than 70% higher than at the time of the sale last year.

But Mr Cable insisted the decision was correct and that the government achieved its primary objective of selling the shares and reducing the risk to taxpayers, citing the 30% stake the government retained in Royal Mail and the £2bn the sale raised for taxpayers in the process.

“There is a lot of froth and volatility in the market and that’s why the government was absolutely right to ensure the sale took place,” he said.  “It could easily have failed and the government would have been left with a lot of costs and liabilities. We did get value for money – the government approached the sale cautiously.”

The 70-year-old Liberal Democrat came under fire from the Communication Workers Union following the sell-off, with general secretary Bill Hayes saying Mr Cable should “consider his position”.

Commenting on the Royal Mail sell-off, Pete Wishart MP who raised the issue in the House of Commons today, said:

“Figures show 77 per cent of Scots were totally opposed to the privatisation of Royal Mail – more than any other part of the UK- and the majority of Scots MPs opposed it in Westminster.

“Now we have had these reports about undervaluing, that figure can only increase.  Only with independence can Scotland be assured of a mail service that meets the needs of our communities – and one which is brought back into public ownership.”

Cable’s comments on the Royal Mail privatisation come after he denied he was the unnamed minister who told The Guardian that UK ministers’ opposition to a currency union with an independent Scotland was a bluff.

The denial follows revelations that a coalition minister, who is reportedly heavily involved in the pro-union campaign, told the newspaper that a currency union would eventually be agreed between Scotland and the rest of the UK to ensure fiscal and economic stability both sides of the border.

The comments have thrown the pro-Union campaign group Better Together into confusion and prompted leader Alistair Darling to say that the Westminster parties would almost certainly include a manifesto commitment to oppose a currency union with an independent Scotland.  However, the former Chancellor of the Exchequer also added to the confusion by appearing to call for a referendum in England, Wales and Northern Ireland on such a currency union.

Asked if the electorate in the rest of the UK should have a say in whether there should be a Sterling Zone, the Labour MP replied “Yeah” and added: “I think the people in the rest of the UK do need to have a say as to whether or not they join a currency union.”

Mr Darling’s comments, made during an interview on BBC Radio 4, contradict the hard-line stance taken by UK Chancellor George Osborne and Labour Shadow Chancellor Ed Balls.

Speaking on Sunday, Deputy First Minister Nicola Sturgeon said there was no need for a referendum in the UK “for the simple reason that the currency arrangements of the rest of the UK wouldn’t be changing”.

“They use sterling right now and would continue to use sterling in partnership with Scotland,”

Speaking today, Finance Minister John Swinney became the latest Scottish Government minister to claim the currency “admission” demolishes a central argument against independence.

Responding to questions in the Holyrood Chamber, Mr Swinney said: “The opinion polls have clearly indicated that people in Scotland do not believe the bluff we’ve heard from the United Kingdom Government ministers and their allies in the Labour Party,”

He added: “What further demolishes the argument is the revelations at the weekend that the private chit-chat within the UK Government is that of course there would be a currency union.

“I think that helps people in Scotland to make it absolutely clear that the UK ministers that have tried to essentially scaremonger on this question have been found to have been seriously wanting in the way in which they have set out their arguments to the people of Scotland.”

The SNP insist that the pound belongs to Scotland as much as to the rest of the UK and that it should be shared as an asset in the same way that the liabilities – including debt – will be shared.  Alex Salmond has suggested that any refusal by a Westminster Government to accept a shared currency-zone would see the rest of the UK shouldering all of the massive £1.4 trillion debt.