Former Lib Dem business secretary Sir Vince Cable has said he has been “vindicated” by the collapse in Royal Mail’s share price after his handling of the firm’s privatisation six years ago drew criticism.
The coalition government was attacked at the time of the float for undervaluing Royal Mail after its shares soared by more than a third on the first day of trading.
The firm’s share price has since tumbled back down to earth to sit around 50 per cent below its original price, at roughly 209p.
Cable told the Sunday Telegraph: “What the share price shows you is that this wasn’t a very sound business. We knew that this was a business that was going to struggle.”
Yet the former Lib Dem leader added: “It’s been a big success in the sense that Royal Mail was in serious difficulty. In a world of email, Postman Pat is as much a part of us as the stagecoach. In order to do that the Royal Mail needed to borrow – it wasn’t going to come from the government.”
Royal Mail has had a torrid 2019 that could be capped by industrial action by workers during the Christmas period.
The former state monopoly is tussling in the courts with the Communication Workers Union (CWU) over strikes.
On Thursday the CWU lost an appeal that sought to overturn a High Court injunction to stop strike action ahead of Christmas and the UK’s 12 December General Election. The CWU vowed to keep battling, however.
In September, Royal Mail appointed headhunters to search for a director to run its struggling UK operations.
The move came a year after the job was abolished when chief executive of UK post and parcels Sue Whalley was ousted due to the arm’s poor performance.