The Government of the United Kingdom has authorised the sale of its last remaining share of the Royal Mail, generating £591.1 in the process.
The news was confirmed on Tuesday (13th October) as the Government sold off the remainder of its stake in the national network to institutional investors. The stake was 13% of the overall share of Royal Mail, whilst in a gesture of goodwill a remaining 1% stake was gifted to eligible Royal Mail staff in the UK.
The sale spells an end to the Government’s involvement in the operation of the
postal system which boasts 500 years of history. The privatisation process was really set in motion two years ago, sparking criticism from political opponents of David Cameron’s Tory coalition with the Liberal Democrats at that time.
Critics suggested that the Royal Mail had been sold of too cheaply, with trade unions supporting that argument.
But the Department for Business, Innovation and Skills has continued the privatisation process, which culminated in Tuesday’s news of the final stake being sold off. In total the privatisation was generated proceeds of £3.3bn, with the delivery operator now fully controlled by private management for the first time in more than five centuries of operation.
Sajid Javid, Secretary of State for Business, stated, “This is a truly historic day for Royal Mail with the workers gaining a share of this history. We have delivered on our promise to sell the Government’s entire remaining stake which means that for the very first time the company is now wholly owned by its employees and private investors. This is the right step for the Royal Mail, its customers and the taxpayer. Proceeds will also go to help pay off the national debt – a crucial part of our long-term plan to provide economic security for working people.”
Chancellor of the Exchequer George Osborne added, “By fully leaving state ownership we have a win all round – for customers, the workforce and the taxpayer. And every penny will be used to pay down our national debt as we continue to bring our public finances under control. Once again, we are also going to recognise the hard work of the staff who have done a great job in turning the company around, and give them a 1% stake to share between them.”
A government statement also explained, ‘There is no policy need for government to hold shares in Royal Mail, as the universal postal service remains well protected by law and by Ofcom. Post Office Ltd, which operates the network of branches throughout the UK, remains wholly-owned by government and was separated from Royal Mail in April 2012.’