MPs have claimed taxpayers lost £1billion in the controversial Royal Mail sell-off because the UK Government underestimated demand for shares.
Ministers were accused of being afraid to fail over the privatisation of the postal service last year, and of receiving “poor quality” advice.
In a hard-hitting report, the business select committee at Westminster said taxpayers were missing out on “significant value”.
Committee chairman, Adrian Bailey, said: “It’s not at all clear that the government’s sale of Royal Mail has brought an adequate and appropriate return for taxpayers.
“The basic facts are that the offer price was 330p per share, the price has risen as high as 618p per share, and now stands around 473p.
“The government cannot blithely dismiss as ‘froth’ our committee’s concern that the low issue price of this prime public asset has cost the taxpayer around a billion pounds.”
The committee said it was “disturbed” that the government may have failed to reap the benefits of the sale of Royal Mail assets, including three sites in London valued by the business department at about £200million but with a “hidden value” of up to £830million.
Mr Bailey added: “This was the most significant privatisation in years. We believe that fear of failure and poor quality advice led to a significant underestimate of the demand for Royal Mail shares.”
SNP postal affairs spokesman Mike Weir said: “This report pulls absolutely no punches and the UK Government have serious questions to answer about the loss of so much taxpayers’ money.
“It is completely indefensible and utterly predictable as part of Westminster’s rush to sell off Royal Mail but this is still shocking. It is a billion-pound botch up – and as yet (Business Secretary) Vince Cable and his colleagues all carry on as if everything has gone to plan.”
A business department spokesman said: “This report rightly acknowledges that the department achieved the Royal Mail sale objectives.
“It was vital to protect the Universal Postal Service – the one price goes anywhere letter delivery service, six days a week – and guard against any need for Royal Mail to request additional taxpayer support.
“The sale also raised almost £2billion for taxpayers, offered 150,000 Royal Mail employees shares in the company for free, created a FTSE 100 company able to access private capital to ensure it has a sustainable future and allowed members of the public to buy shares in the company.”