Taxpayers’ Stake In Royal Mail To Be Sold

The Government is to sell its remaining 30% share in the Royal Mail (LSE: RMG.L – news) , currently worth around £1.5bn, George Osborne has announced.

The Chancellor said he would begin offloading the stake within months, and the money would be used to cut the deficit.

Heralding the sell-off – two years after the initial flotation – Mr Osborne said: “It is the right thing to do for the Royal Mail, the businesses and families who depend on it – and crucially for the taxpayer.”

But following the announcement, Royal Mail’s share price was down slightly.

It comes as the Government was also selling off other assets worth another £500m, including land around London’s King’s Cross for about £345m.

And departments have found a further £2.5bn of cuts for this financial year – reducing the nation’s debt by a total of £4.5bn as it tries to balance the books.

Postal workers’ union CWU said the final sell off of Royal Mail shares showed the Conservatives were “only interested in privatisation dogma and making the rich richer”.

General secretary Dave Ward said: “When the first part of this privatisation was completed by the Coalition we were told that this was because Royal Mail needed private capital to invest in its future, but if you ask the workforce they have seen hardly any new investment but have witnessed the worse type of short term investors making a killing without any regard to the long term future of the company or the services it provides to the public.

“As a minimum, if this Government wanted to say they were interested in the workers then they could at least increase the workers’ stake in the company.”

Earlier, Mr Osborne said it was important to continue to control spending – with savings of £13bn already earmarked for 2015/16 ahead of the latest announcement.

The Government has appointed Rothschild to advise the Department for Business on the sale of the 30% Royal Mail stake.

In 2013 ministers sold 70% of the company. They were advised by Goldman Sachs (NYSE: GS-PB – news) and UBS (NYSEArca: FBGX – news) , and came under fire when the share price was set at 330p and then soared on the stock market.

Treasury aides refused to say whether the shares would be offered to the public, or restricted to institutional investors.

However, no shares will be reserved for employees – who received 10% last time.

Unveiling the package of measures to MPs, Mr Osborne insisted it showed ministers were “getting on with what we promised”.

“When it comes to living within your means, the sooner you start, the smoother the ride,” he said.