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British gov't plans to sell Royal Mail shares

Xinhua, June 4, 2015 Adjust font size:

The British government plans to sell its 30 percent stake of shareholdings in Royal Mail Group, aiming to achieve the deficit cut target.

British chancellor of exchequer George Osborne Thursday said that the Royal Mail shares, which is currently valued at 1.5 billion pounds (or 2.3 billion U.S. dollars), would be sold when ministers could "be sure" they get value for money.

He 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."

Royal Mail was listed on the London Stock Market in October 2013, recorded the largest Initial Public Offering (IPO) of the year in European market.

Osborne also announced three billion pounds cut from government spending this year.

Previously, the British government announced its commitment to clear deficit by fiscal year 2018-19 without increasing income tax or VAT. Earlier this week, the government confirmed that it would extend its plan to sell off shares in Lloyds Banking Group to the end of the year.

Analysts reckon that the government needs to find a further 30 billion pounds of savings over the next three years, including 12 billion pounds to come out of welfare spending and 13 billion pounds from cuts to government departments.

The Institute for Fiscal Studies (IFS) has said public spending cuts of one percent a year in 2016-17 and 2017-18 will be "more difficult to achieve" than was suggested in the Conservative Party's general election manifesto.

Osborne will set out full details of future spending cuts in a Budget statement on July 8. (1 pound=1.54 U.S. dollars) Endit