Chancellor George Osborne announced the move yesterday as part of a £4.5 in-year deficit reduction programme, which also included £3bn of Whitehall departmental savings.
Speaking in the House of Commons, Osborne said the time was right to sell the remaining 30% government stake in the postal firm this year.
The transaction will be designed to deliver best value for money to the taxpayer, he said, following criticism from Labour that the initial sale of the government stake in October 2013 had ‘short-changed the taxpayer’.
Shares in the Royal Mail were initially floated at 330p per share, and are currently trading at 493.4p.
Further detail on the form of the sale to be announced in due course, Osborne said.
“I am today announcing that the government will begin selling the remaining 30% shareholding we have in the Royal Mail,” he told MPs.
“It is the right thing to do for the Royal Mail, the businesses and families who depend on it – and crucially for the taxpayer.”
Responding to the announcement, Labour’s shadow chancellor Chris Leslie said the “botched privatisation” in the last Parliament had short-changed taxpayers by hundreds of millions of pounds.
“The government now needs to explain how it has learned the lessons of last time so that the same mistakes aren’t simply repeated,” he added.
Dave Ward, general secretary of the Communication Workers Union, which represents Royal Mail staff, said the union would oppose the sale.
“Selling off the final 30% of Royal Mail threatens the very existence of the one-price-goes-anywhere, six-day delivery service that Royal Mail provides to 29 million UK addresses,” he 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 worst 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.”
