Business secretary Vince Cable has said the government “had to” privatise Royal Mail because “there were no other ways” to safeguard its future.
Speaking to Evan Davis on Radio 4’s Today programme, Cable said: “[Royal Mail has] lost a lot of their business because of email, so they’ve got to raise a lot of private capital to invest, and they can only do this from private markets.
“They can’t get the money from the government, and so that’s why we’ve had to do this privatisation.”
He said the government had commissioned a report into all the options for safeguarding the future of Royal Mail, including alternatives to privatisation, but concluded an IPO was the only option.
“We looked at all the alternatives […] and came to the conclusion there were no other ways of doing this,” he said.
Evan Davis asked why the government hadn’t sold off Royal Mail bit by bit, rather than selling more than half all in one go.
Cable replied: “The argument against doing it in lots of small bits is that there is a big cost involved in flotation […] and we don’t want to keep repeating that.”
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