I was digging around the Parliamentary website yesterday (someone has to!) and came across this comment from Jack Straw, made in May 2007. “It is utterly irresponsible!” he exclaimed about the Lib Dem administration that had just taken over Hull City Council.
The issue at stake was the Council's 31% stake in Kingston Communications PLC. The Lib Dem administration decided that it was time to cash in the shares and bank the money instead. Apparently, such a move was regarded by the new Lib Dem council leadership as safer than playing the stockmarket with council taxpayers' cash.
Hull Labour MP Diana Johnson, however, seemed to think the sale was a bit of a bad idea. Nevertheless, the sell off by the Lib Dems netted the authority a cool £100 million.
The shares in the company were trading at around 80p when the sale went through last year. Now they are less than 10p.
Under Labour, the investment would now be worth about £12-13 million. I bet the residents of Hull are sighing with relief that the Council decided to follow the "utterly irresponsible" policy of protecting their investment. Apparently, the money from the sale last year could now buy the company twice over!
Interestingly, when the fuss first blew up, Blaydon MP Dave Anderson came rushing in with an EDM attacking the sale of the shares. Were he to lose his seat and need to get a new job, can I suggest that becoming a financial adviser may be an occupation he would wish to avoid!?