Government uses Royal Mail proceeds to pay debt

Half of the Government’s remaining stake in Royal Mail has been sold, raising £750million to help pay down national debt, the business secretary confirmed.

Sajid Javid said 15% of the group had been sold to institutional shareholders at 500p a share.

A further 1% will be given to Royal Mail employees, meaning staff including postal workers across Britain will share in a chunk of the company worth around £50million, adding to the 10% awarded to employees when the coalition government began the flotation of the then-state-owned firm in 2013.

Members of the public were not involved in this latest share placing, although there will be further stake sales.

Mr Javid said the sale was “good value for taxpayers”.

The shares were sold by way of an “accelerated bookbuilding” process which will see the taxpayer holding in the group halved from 30% to 15%.

Ministers were immediately criticised by Labour, who said they had failed to learn lessons from the earlier “botched fire sale” of the company.

Shares in the group have risen around 20% since the start of the year.

They are now more than 50% higher than they were when the rest of the company was floated in 2013 in a controversial process.

Ministers at the time came under fire after the share price soared immediately, leaving investors with an instant profit at the expense of taxpayers.

The latest share sale also comes after a year in which Royalmail cut the number of employees by 5,500.

It has around 143,000 staff in its main UK business.

Mr Osborne first announced plans for the Government to sell its remaining stake in Royalmail last week.