Chancellor George Osborne has announced plans to sell the Government’s remaining shares in Royal Mail in the hope of raising £1.5bn.
The Department for Business, Innovation and Skills will sell the shares in a process beginning this year, following Royal Mail’s IPO in October 2013.
Currently, BIS holds a 30 per cent stake in the business, while 10 per cent is held by staff, and the remainder held by private investors.
Rothschild has been appointed to advise BIS on the sale.
Shares in Royal Mail were initially floated at 330p per share, and were trading at 526p at market close yesterday.
Announcing the plans, 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.”
At the same time, the Chancellor also announced that the Government has identified a further £3bn in savings from Government departments.
The cuts, which will exclude the NHS, schools and aid, are led by the Department for Transport, which will save £545m, partly through the sale of land around London’s Kings Cross station.
The total of £3bn in savings for this financial year is equivalent to around 3 per cent of unprotected departmental spending this year, and is expected to come from tightly managed budgets and efficiency savings, as well as asset sales.
It includes £80m in savings from HM Revenue & Customs, as well as £103m from the Department for Work and Pensions.
The announcements come months after the Financial Times reported that the Government would seek to dramatically reduce the headcount in the DWP following the election.
The FT warned in March that a Conservative Government would seek to cut as many as 30,000 jobs in the DWP, more than a third of the total headcount.
However, Money Marketing understands that none of the £103m total is expected to come from redundancies.
A departmental spokeswoman said: “During the last Parliament, we improved the efficiency of the department, reducing DWP running costs by £2 billion in 2014/5 compared to 2009/10.
“DWP will be contributing £105m of efficiency savings this year, through departmental budgets and increasing debt recoveries.”