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UK PoliGAF |OT3| - Strong and Stable Government? No. Coalition Of Chaos!

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P

Pyroclastic

Banned
Did anyone else get on the cable for leader train before the GE? He was as long as 50/1 at one point which I annoyingly missed out on. still got a decent amount at 17/1
 
T

tomtom94

Member
I mean, Cable is one of the only politicians who talked sense about the financial sector, but he is also probably the politician who had his reputation ruined most by the coalition.
 
P

Protome

Member
tomtom94 said:
I mean, Cable is one of the only politicians who talked sense about the financial sector, but he is also probably the politician who had his reputation ruined most by the coalition.
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Yeah, he's the kinda guy you put in charge to help rebuild the party for the next guy to go into an election. Not the kinda guy you take into an election.
 
J

Jackpot

Banned
Instead of selling Royal Mail shares to the public, they sold them to huge financial institutions, including those involved in valuing the shares. Big surprise, turns out the shares were massively undervalued but it was ok because Cable had a "gentleman's agreement" that the banks who bought them wouldn't liquidate those shares for instant profit. But they did. And Cable made excuse after excuse for the whole debacle.
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Summary of Cable's flagship project whilst in government.

Undervaluing Royal Mail shares cost taxpayers £750m in one day

MPs accuse Vince Cable of ignoring City warnings that maximum share price of 330p left Royal Mail undervalued
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The early jump in the share price, dismissed by Cable as "froth and speculation" was followed by a continued rise to a peak of 618p in January. The shares closed at 563p yesterday, still 70% higher than the float price.
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Despite overwhelming public demand for the shares (the public ordered enough to own the whole of the postal service but were cut down to just £750 per person), Cable allowed 16 long-term investors, mostly pension funds, priority access to the shares.

The audit office said this was part of the government's "expectation that they would form part of a stable long-term and supportive shareholder base".

At the time, Cable said: "We wanted to make sure that the company started its new life with a core of high quality investors who would be there in good times and bad, interested in Royal Mail and the universal service it provides for consumers over the long term."

However, the audit office said six of the 16 "priority investors" selected by Cable had sold all of their allocation within weeks of the float, at a substantial profit.

The watchdog said that by the end of January 2014 just 12% of the company's shares were held by the "priority investors".

A large proportion of their shares were gobbled up by hedge funds, which Cable has repeatedly attacked for being short term investors, describing them as "spivs and gamblers".

Within a fortnight of the float, a London hedge fund whose boss was memorably described as a "locust" by German politicians, bought up so many shares that it became Royal Mail's second-biggest investor after the government, which retained a 30% stake. stake.
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https://www.theguardian.com/uk-news/2014/apr/01/royal-mail-undervaluing-taxpayer-cable

Vince Cable defends Royal Mail sell-off in Commons debate

Business secretary insists the privatisation was a success but Chuka Umunna says taxpayers were 'disgracefully shortchanged to the tune of hundreds of millions of pounds'
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The business secretary, Vince Cable, has refused to apologise over the government's privatisation of Royal Mail, despite a scathing report from the National Audit Office, which said undervaluing the share sale had cost the taxpayer £750m in a single day.

In a lively debate in the House of Commons, Cable defended the controversial float last October, after coming under fire from the shadow business secretary, Chuka Umunna, and other MPs. "The last thing I intend to do is apologise," Cable said. He insisted that the privatisation had been a success and that there had been a real risk that the flotation could have failed if the shares had been priced higher.

"We've taken a loss-making public enterprise and turned it into a successful public company," he added. He accused Labour itself of selling state assets off on the cheap.
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Independent analyst Louise Cooper judged the government as "naive at best, incompetent at worst". She tweeted during the Commons debate: "It was Vince Cable's responsibility to make the pricing decision on Royal Mail and he called it very wrong."
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https://www.theguardian.com/uk-news/2014/apr/01/royal-mail-sell-off-chuka-umunna-urgent-question

The ideal in "book-building" a stock of potential investors in advance of a sale is to see it two times oversubscribed. The Royal Mail offer was 24 times oversubscribed. The 330p price soared 38% to 455p within hours. More than £750m drained into the pockets of speculators. Never can the British taxpayer have been ripped off so soundly in so short a time.

Within weeks of the sale, Goldman Sachs's own analysts were predicting a price of 610p, almost twice what the "advisers" had been advising. The government had been shockingly ill-advised. As the price went up past 600p, Cable kept dismissing it as "irrational exuberance, froth, speculation". He indicated everyone should wait until the price came down. It is now 562p. Worse, he had allocated bundles of shares to 16 City institutions on a "gentleman's agreement" that they would hold them as "a core of high-quality investors who would be there in good times and bad". Within weeks, over half this stake had been sold, and to precisely "the hedge funds and other speculators" that Cable had pledged to keep out. Just four of the 16 are still big shareholders.
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https://www.theguardian.com/commentisfree/2014/apr/01/royal-mail-privatisation-taxpayer-loser

Scummy scum is scum. I will still retain the option to vote for a local Lib Dem MP or Councillor in an election, but the leadership can go hang.
 
H

hohoXD123

Member
Doesn't matter which party you support, this tactic is just shameful

https://www.theguardian.com/uk-news/2017/jul/20/tories-use-take-out-the-trash-day-to-dump-controversial-reports

Theresa May has been accused of an “absolute affront” to democracy after dumping dozens of official documents online on parliament’s last day of term, showing the police force numbers have dropped to a 30-year low and the number of soldiers has fallen by 7,000.

The government has published very little for weeks after the election but about 22 written statements and dozens of Whitehall reports were released on Thursday, just as MPs embark on their long summer break.

The tactic – known as “take out the trash day” – means MPs will not be able to scrutinise the information properly while parliament is away for the next seven weeks. The statements included a damning human rights assessment of the UK’s ally Saudi Arabia, the cancellation of the electrification of a key railway and a decision to opt into some new EU regulations on crime-fighting, even though the UK is heading for Brexit.

Toby Perkins, a Labour MP, said the rush of documents released on the last day before recess was an “absolute affront to parliament”.
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More detail on the documents themselves are in the article.
 
H

Huw_Dawson

Member
J

Jackpot

Banned
Huw_Dawson said:
Go have a look at the value of RM's shares now compared to the value they were at at sale.
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How does that affect anything? They were >550p for 6 months. Think how much money the taxpayer could have made. Are you pretending the companies involved didn't make a huge profit because of what the share price is now, 3 years down the line? How does it have anything to do with that whole sordid "gentleman's agreement"? And why are you completely ignoring the National Audit Offices' investigation? You think that one number suddenly renders that entire report false?

Jesus, that's the sort of superficial argument I'd expect from a Ukipper.
 
M

Mr. Sam

Member
Under normal circumstances, I'd say that Cable is a seatwarmer and destined to stand down before the next election. However, when the next election could be at any time...
 
C

CyclopsRock

Member
I'm a tax payer and I made plenty of money on that RM sale. Ya snooze you lose, fuckers.

Edit:

"The Tories do not act in the interests of the whole UK. They have put their own survival, finding £1bn for a deal with the DUP, ahead of everything else and it's communities like those in south Wales that pay the price."

Oh do fuck off. Of course they can find a billion for the DUP. The DUP, unlike your bumfuck backwater rail road, isn't an endless pit of money to dump cash into. It was 3x over budget - three times! It cost an extra £1.9bn to not complete the job! Yeah, I'm sure not finishing it will really be ”of massive economic detriment to the country." If only the train between Swansea and Cardiff would accelerate slightly faster.
 
P

Psychotext

Member
I wonder if there's a list somewhere of UK infrastructure / capital projects and how much they cost vs how much the original budget was. Would be fascinating.

That railway electrification one is particularly funny given how much money they already blew on raising bridges etc.
 
C

Coriolanus

Banned
CyclopsRock said:
"The Tories do not act in the interests of the whole UK. They have put their own survival, finding £1bn for a deal with the DUP, ahead of everything else and it’s communities like those in south Wales that pay the price.”

Oh do fuck off. Of course they can find a billion for the DUP. The DUP, unlike your bumfuck backwater rail road, isn't an endless pit of money to dump cash into. It was 3x over budget - three times! It cost an extra £1.9bn to not complete the job! Yeah, I'm sure not finishing it will really be “of massive economic detriment to the country.” If only the train between Swansea and Cardiff would accelerate slightly faster.
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remains to be seen, doesnt it?
 
Spuck-uk

Spuck-uk

Banned
tomtom94 said:
I mean, Cable is one of the only politicians who talked sense about the financial sector, but he is also probably the politician who had his reputation ruined most by the coalition.
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Also the guy that helped sell off the Royal Mail.

Thats the Dems firmly tilted back toward the right hand side of the spectrum, with the return of an orange booker in charge.
 
W

Walshicus

Member
I suppose we should be surprised that a Tory is able to defend spending £100m per seat to keep Maybot in power, but easily dismisses infrastructure spending in Wales as being of little consequence...
 
Spuck-uk

Spuck-uk

Banned
CyclopsRock said:
I'm a tax payer and I made plenty of money on that RM sale. Ya snooze you lose, fuckers.
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My folks made a bunch when gas/electric services were sold off at a pittance, didn't make it less of a shockingly shit idea that's cost everyone in the country ever since.
 
H

hohoXD123

Member
Spuck-uk said:
My folks made a bunch when gas/electric services were sold off at a pittance, didn't make it less of a shockingly shit idea that's cost everyone in the country ever since.
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My folks made a bunch from Brexit and the consequent sterling freefall. Brexit is gonna be great right? Smh at this whole I made my money so fuck everyone attitude.
 
R

Royal_Phalanx

Member
CyclopsRock said:
I'm a tax payer and I made plenty of money on that RM sale. Ya snooze you lose, fuckers.

Edit:

"The Tories do not act in the interests of the whole UK. They have put their own survival, finding £1bn for a deal with the DUP, ahead of everything else and it’s communities like those in south Wales that pay the price.”

Oh do fuck off. Of course they can find a billion for the DUP. The DUP, unlike your bumfuck backwater rail road, isn't an endless pit of money to dump cash into. It was 3x over budget - three times! It cost an extra £1.9bn to not complete the job! Yeah, I'm sure not finishing it will really be “of massive economic detriment to the country.” If only the train between Swansea and Cardiff would accelerate slightly faster.
Click to expand...

"Infrastructure spending pointless" says resident Tory. Not surprising considering you seem to defend everything they do. Ignoring that purely electric is more efficient as well.
 
Theonik

Theonik

Member
CyclopsRock just hates rail infrastructure. Also doesn't know much about it in real terms.
E: I remember the whole 'our rails aren't wide enough for double decker trains' debacle. m8
 
D

Dougald

Member
Has someone crunched the numbers on how much money this is saving, vs the increased costs of buying diesel/electric trains for that entire line instead of electric, and the cost running them over their lifespan?
 
Theonik

Theonik

Member
JonnyDBrit said:
Not to mention this refusal to invest on infrastructure is part of why we got into this mess...
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The UK rail infrastructure was largely scrapped in the 1960s leaving only a small amount of the original routes that made up the network in an effort to cut its maintenance cost, at a time when some people thought that cars were the way forward, the scheme failed to achieve its original goal of reducing the rail deficit as it only increased as a result and decades of underinvestment hurt the infrastructure further. One of the biggest weaknesses of the changes were that by reducing available routes, it made the network more congested, as the initial prediction that people would drive to the nearest station then take a train didn't come to pass, as people either just drove, that increased road traffic or you had more people using less trains on less tracks to make their journeys. Having less redundancy also makes the network more vulnerable to faults as trains can't be re-routed around them. I've been stuck in the Midlands for more than 3hrs more than 4 times this year because of these changes where a train has died ahead of us but there is no other way for trains to move past.
 
J

JonnyDBrit

Member
Theonik said:
The UK rail infrastructure was largely scrapped in the 1960s leaving only a small amount of the original routes that made up the network in an effort to cut its maintenance cost, at a time when some people thought that cars were the way forward, the scheme failed to achieve its original goal of reducing the rail deficit as it only increased as a result and decades of underinvestment hurt the infrastructure further. One of the biggest weaknesses of the changes were that by reducing available routes, it made the network more congested, as the initial prediction that people would drive to the nearest station then take a train didn't come to pass, as people either just drove, that increased road traffic or you had more people using less trains on less tracks to make their journeys. Having less redundancy also makes the network more vulnerable to faults as trains can't be re-routed around them. I've been stuck in the Midlands for more than 3hrs more than 4 times this year because of these changes where a train has died ahead of us but there is no other way for trains to move past.
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Funny thing is, I remember studying that in class, either as part of history or geography. It always struck me as interesting how a plan to save costs in the long term wound up really backfiring down the line.
 
Theonik

Theonik

Member
JonnyDBrit said:
Funny thing is, I remember studying that in class, either as part of history or geography. It always struck me as interesting how a plan to save costs in the long term wound up really backfiring down the line.
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It usually does! What savings advocates often fail to understand, is that saving money is good if there is a notable return on investment! And especially with government spending on infrastructure they tend to create benefits in the real economy as well.
 
C

CyclopsRock

Member
Royal_Phalanx said:
"Infrastructure spending pointless" says resident Tory. Not surprising considering you seem to defend everything they do. Ignoring that purely electric is more efficient as well.
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They do loads of bad shit I don't defend, but I'm not going to pretend that electrifying the railway between Cardiff and Swansea is our 21st Century Hoover Dam. I'm all in favour of infrastructure spending, but not "literally anything no matter the high cost and limited benefit".

Theonik said:
CyclopsRock just hates rail infrastructure. Also doesn't know much about it in real terms.
E: I remember the whole 'our rails aren't wide enough for double decker trains' debacle. m8
Click to expand...


Sorry sorry sorry I meant load guage rather than track gauge.
 
H

Huw_Dawson

Member
Jackpot said:
How does that affect anything? They were >550p for 6 months.
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So you accept that the value of the shares now is broadly the same as they were when they were sold?

Seems to me like that government sold RM for its value. The NAO report is right of course in that the approach was cautious, but to mark it out as some massive scandal is disingenuous to reality - not, of course, abnormal for the false, misleading and shaky facts and debate that characterises modern British politics.
 
D

Deleted member 231381

Unconfirmed Member
Huw_Dawson said:
So you accept that the value of the shares now is broadly the same as they were when they were sold?

Seems to me like that government sold RM for its value.
Click to expand...

I sell a book to someone for £500. They immediately sell it on to someone for £1,000. The third person, several years later, sells it on for £500.

If I had listed a price of £1,000 for the book when I originally sold it, I would have had someone buy it, and I would have been £500 better off. The fact it was later sold again at £500 is immaterial.

Vince Cable fucked up the Royal Mail privatisation, and badly. I mean, it's not the sort of mistake that any political party is immune from - the Conservative privatisations almost always grossly undervalued what they sold, and Gordon Brown famously misjudged the direction of gold prices. But you can't row away from the fact that this was the most significant event of Cable's ministerial career, and it was a fuckup.
 
H

Huw_Dawson

Member
Crab said:
Vince Cable fucked up the Royal Mail privatisation, and badly.
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Overstating this a tad, are you not?

To use your example, if I had marked that book as being worth £1000, and the buyer knew that was all they could get for it and therefore it had no greater value to them financially, they would not buy the book. Or they would sell it for £2000 or something and then the original seller would still look bad.
 
J

JonathanEx

Member
hohoXD123 said:
Just watched the Mash Report. It got a few chuckles out of me, not bad.
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Yeah, I thought it was alright. I thought the 'Newsdesk' bits were a bit slow paced (put the picture up as you say the story! The joke pace will be better!), the Tory person was a bit weird as I wasn't sure what the joke was (is it that Tories are that horrible haha? Well no, he is a real right-wing standup, so it's the idea itself?), but the tone of the social media parts were really funny - and the Trump segment was brilliant. Andrew Hunter Murray's 'straight-face' after saying some of the absurd bits was incredible. That's top work there. How he held that, remarkable.
 
J

Jackpot

Banned
Huw_Dawson said:
So you accept that the value of the shares now is broadly the same as they were when they were sold?

Seems to me like that government sold RM for its value.
Click to expand...

This is obtuse, even for you. It requires an outlook that proclaims everything has a static value that is immutable for all time - the opposite of how stocks work.

And just going to dodge the rest of the post because... it proves you wrong? When everyone from independent watchdogs to even Goldman Sachs say the price was too cheap, you know you fucked up.

Nothing will change this fact:

Undervaluing Royal Mail shares cost taxpayers £750m in one day
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Not even your absurd attempt to rewrite how the basic buying and selling of goods works.
 
D

Deleted member 231381

Unconfirmed Member
Huw_Dawson said:
Or they would sell it for £2000 or something and then the original seller would still look bad.
Click to expand...

...

Honestly, is there any point engaging with you when you're doing this? You must know what you're saying is complete and total rubbish. Just read what you wrote again and think about it for a little bit.
 
Theonik

Theonik

Member
Huw_Dawson said:
Overstating this a tad, are you not?

To use your example, if I had marked that book as being worth £1000, and the buyer knew that was all they could get for it and therefore it had no greater value to them financially, they would not buy the book. Or they would sell it for £2000 or something and then the original seller would still look bad.
Click to expand...
If the market then values the book at £1000 you sold it at less than market value. The buyer that got it for £1000 would then try to sell it for a profit but prices can only be as high as the market can bear, so they'd lose money in all likelihood The point here is, they should have let the market decide what the stocks were worth. If the buyer then profits, or loses money on that then it's their business.
 
H

Huw_Dawson

Member
Jackpot said:
This is obtuse, even for you. It requires an outlook that proclaims everything has a static value that is immutable for all time - the opposite of how stocks work.
Click to expand...

No, it requires to assess things with logic, rather than assessing it via rosette colour.

Royal Mail was sold cheaply, but it was far from the dramatic balls-up that you will hear lots of people say it was. It was sold cheaply to ensure a sale - the cautious approach that the NAO and others were not a fan of.

My point was mostly to put the rhetoric into perspective.

And no, I did not ignore the rest of your post. It is faster to reply to the crux of the argument than address every point, especially when those points are there to back up the core assumption or assessment of the poster. The alternative is to write slow wall-of-text posts. This is inconvenient when I am typing these at posts at train stations, on the bus, or otherwise.

Crab said:
...

Honestly, is there any point engaging with you when you're doing this? You must know what you're saying is complete and total rubbish. Just read what you wrote again and think about it for a little bit.
Click to expand...

The government selling something into the private sector or floating a going concern is a different situation to the speculation that can occur after the sale.

In addition, if the point of the sale is to ensure the sale happens rather than ensuring the absolute maximum financial gain was achieved, as it was with the case of the RM sale, then it is important to bear that in mind, as the NAO assessment was.

As ever I doubt there is serious disagreement about the basic facts of what various groups made of the sale - but the fundamental sale was a successful bid to raise money for the treasury which reduced the need for cuts elsewhere.
 
D

Dougald

Member
Personally I don't give a damn whether the sale made money for the taxpayer or not, it's criminal that the Lib Dems were complicit in letting the Tories sell off yet another public asset which should never have been sold
 
H

Huw_Dawson

Member
Theonik said:
So why was 'a sale' necessary so as ensuring it was worth screwing the taxpayer. What benefit did it accomplish?
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The NAO report does a solid job outlining the reasons for the sale: https://www.nao.org.uk/report/privatisation-of-royal-mail-plc/

My personal take on the broad reasons for the sale - it raises money for the government, but the government's cautious approach accounted for eventualities that did not occur (a worsening economy, industrial action and whatnot). It also allowed for private capital to enter the RM system allowing for a better business. So overall it was a success - however, the rub is that this was a success that could have earned more money for the taxpayer. So I look at it on balance rather than calling it the horrendous end-of-days calamity that various voices call it.

So just to repeat: yes the government could have got more money for it, but the RM sale was successful at its aims.
 
T

TimmmV

Member
Huw_Dawson said:
No, it requires to assess things with logic, rather than assessing it via rosette colour.
Click to expand...

This has got to be a troll right?

Huw_Dawson said:
In addition, if the point of the sale is to ensure the sale happens rather than ensuring the absolute maximum financial gain was achieved, as it was with the case of the RM sale, then it is important to bear that in mind, as the NAO assessment was.

As ever I doubt there is serious disagreement about the basic facts of what various groups made of the sale - but the fundamental sale was a successful bid to raise money for the treasury which reduced the need for cuts elsewhere.
Click to expand...

If the point of selling it was to get as much money as possible then surely they failed to do so given how much the share value subsequently rose - this is money that otherwise could be used to prevent cuts in other areas
 
D

Deleted member 231381

Unconfirmed Member
If they'd said they'd issue the shares at 800p, and they didn't manage to sell all of them, then they can sell a second tranche at 720p, and nothing has been lost except time.

If they issue the shares at 560p, and people buy them when they would have bought them at 720p, what's been lost is an enormous amount of revenue.

You're justifying the massive undervaluing by saying 'they just wanted to make sure a sale occurred!' when the consequences of no-sale (small wait, try again at lower price) are inconsequential compared to the consequences of undervaluing.

Your justification sucks.
 
Theonik

Theonik

Member
Huw_Dawson said:
The NAO report does a solid job outlining the reasons for the sale: https://www.nao.org.uk/report/privatisation-of-royal-mail-plc/

My personal take on the broad reasons for the sale - it raises money for the government, but the government's cautious approach accounted for eventualities that did not occur (a worsening economy, industrial action and whatnot). It also allowed for private capital to enter the RM system allowing for a better business. So overall it was a success - however, the rub is that this was a success that could have earned more money for the taxpayer. So I look at it on balance rather than calling it the horrendous end-of-days calamity that various voices call it.

So just to repeat: yes the government could have got more money for it, but the RM sale was successful at its aims.
Click to expand...
If your aim is to minimise cuts then you should maximise the sale price. Ignoring the fact that selling at all was asinine, it failed to maximise short term gain for the government that was the primary objective. Completing the sale should not really an objective. If I list 10 shares in my house for £1000 each then they don't sell I can list them for £900 each and so forth. If I list them at £100 and they all sell I only make £1000 in the sale. If I listed them in the second way, I might sell 0 for £1000, one for £900, one for £800, two for £700 and so on. In that approach I got a lot more out of that sale. This makes sense to do because I do not NEED to sell the asset as it's a profitable investment, all that I lose is time.

E: Crab pls
 
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