An article published in the Charter Institute of Public Finance and Accountancy’s (CIPFA) academic journal Public Money and Management, by Professor David Parker, the Governments official historian of privatisation, argues that the sale of Royal Mail was in effect a wealth transfer from the British taxpayer to foreign governments.
In the article Professor Parker compares the privatisation of Royal Mail to other privatisations in the 1980s and 1990s and concludes that the sale was of poorer value than any in that period. His research shows that the sale resulted in £2.5 billon less than taxpayers might have received if compared to 1980s and 1990s.
He states that:
“As large volumes of the shares were bought by foreign investors including sovereign wealth funds, there was a wealth transfer overseas—in the case of sovereign wealth funds, in effect to foreign governments.”
Professor Parker also concludes that the privatisation did not follow previous sales in marketing shares to the general public and that as a result:
“It seems that Baroness Thatcher’s programme of ‘popular capitalism’ is now consigned to history.”
The article concludes that:
“With the shares seriously under-priced and the exchequer bearing the pension deficit, it is difficult to judge this sale as obviously good value for taxpayers.”
Professor David Parker is the UK Government’s official historian of privatisation, a member of the Government’s Regulatory Policy Committee as well as Emeritus Professor of Privatisation and Regulation at Cranfield School of Management.
A copy of the article in Public Money and Management, CIPFA’s academic journal can be downloaded for free here:
T: +44 (0)20 7543 5703
T: +44 (0)20 7543 5830
T: +44 (0)20 7543 5787