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A case to answer

The likes of the Royal Mail rip-off must never be repeated and if need be, legal action should be brought against those responsible, says JOHN ELDER

A week has passed since the National Audit Office (NAO) published its post-mortem report on the bargain basement sell-off of Royal Mail last October.

While confirming what was already blindingly obvious to anyone - that British taxpayers were well and truly ripped off - its findings actually amount to only a moderated and conditional censure of the Department for Business, Innovation and Skills' role in the deeply flawed privatisation.

Nonetheless, the report did provide some extra ammunition for the media, opposition MPs et al, to draw their own conclusions and rail at the conduct of those behind this unsupported sale of a prized and valuable public asset.

A snapshot of the observations made in the immediate wake of the NAO's judgement reveal accusations of a "botched" or "bungled" privatisation, and more personal characterisations such as one that described Business Secretary Vince Cable as being "massively naive" in his handling of the sale. And there was quite a lot said about the winners and losers in the cooked-up deal - and by how much.

However, in all the media furore about the issue last week, two crucial questions appear to have been overlooked.

First, what practical purpose has been served by an expensive, albeit seemingly independent, value-for-money examination of this distinctly shady deal?

All the revelations in the NAO report and the subsequent judgements made by commentators, while important for public consumption, are effectively hot air.

The privatisation was a done deal - signed, sealed, delivered and the jackpot long since divided up among the winners. Nothing short of re-nationalisation can change this position, and that's not likely to be on the cards.

Now, the role of the NAO is to scrutinise public spending on behalf of Parliament.

It is in a position "to comment objectively and independently on what government does" and "cannot therefore act as adviser on the specific decisions the government takes."

The watchdog reports the results of its audits to Parliament and will "hold government departments and bodies to account for the way they use public money, thereby safeguarding the interests of taxpayers."

Pray, how has the NAO protected the interests of taxpayers when its report will not lead to redressing their considerable financial loss from the outrageously underpriced Royal Mail flotation?

On this basis, the NAO had no place as an adviser to the Department of Business, Innovation and Skills in the latter's dealings to transfer Royal Mail to private hands. This leads us to the second question that seems to have been missed by commentators.

Why is there not in place an NAO-type body that could have been part of the mix, as an independent observer or government adviser, in the period leading up to and setting the initial public offering (IPO) price for shares?

This point is especially relevant considering that an array of investment banks were both advising the government and leading proceedings to manage the sale of Royal Mail.

A conflict of interest issue must surely have arisen here, aside from the fact that there appear to be serious questions marks against three out of the four banks that actually led the privatisation. (The writer outlined these concerns in an article he wrote for this newspaper last November.)

Despite the concerns that were already in the public domain before the sale, it is clear they were not considered sufficiently consequential for Cable and his departmental sidekicks to take due notice.

It seems unlikely that an independent advisory watchdog of the kind suggested would have disregarded conflict of interest and other issues involving the three banks had its services been available.

Indeed, had such a body been present as an observer for, or adviser to the Department for Business, Innovation and Skills, it would have put a whole new complexion on the privatisation.

Such a move would have blocked Cable, Fallon and crew from following their own agenda in the sell-off, and is sure to have triggered a much more realistic IPO price.

It would also have prevented the significant financial loss to the state and shameful - perhaps even criminal - scandal that has beset an already rotten government as a consequence.

As we now know, these individuals and the government of which they are a part have rejected the NAO's findings.

What did an unrepentant and arrogant Cable say to Parliament on April Fool's Day about his role in the debacle?

"The last thing I intend to do is apologise." Charming.

In these circumstances, perhaps Parliament should be pressed to raise the question of establishing the kind of independent advisory body suggested here to play an advocacy role in any future such privatisations that may arise.

Let's not forget that the state's remaining 30 per cent stake in Royal Mail may be put up for grabs before next year's general election.

We don't want that shareholding going for a song too - nor that of any other asset still in public ownership and on the cards to be flogged off to all takers.

But hang on a minute. There may be something else worth looking into regarding the Royal Mail flotation.

On 1 April when the NAO report was published, a Morning Star editorial included the following comments: "Had Cable and his cronies behaved in this manner in local government, they would have been surcharged for the reckless loss incurred and removed from office. This crime should be reversed at the earliest opportunity."

If either of these observations is valid, perhaps there is a case to prosecute Cable and Michael Fallon for their leading role in the Royal Mail rip-off.

There may be enough of us willing to contribute towards hiring legal counsel to establish whether there are indeed sufficient grounds to take these two characters to court.

In a parallel example, human rights lawyer Geoffrey Robertson QC is recently reported to have offered his services for free to campaigners should they decide to take legal action against the Ministry of Justice concerning an alleged ban on books being sent to prisoners.

It appears the lawyer considers that Justice Secretary Chris Grayling has a case to answer.

And Labour MP Thomas Docherty has reportedly asked Scotland Yard to investigate Culture Secretary Maria Miller over her parliamentary expenses claims.

Who knows, Cable and Fallon may really have a case to defend. It would be interesting to find out.

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