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Will the taxpayer stake ever be sold? Coalition to keep the keys to Royal Mail for now

Will the taxpayer stake ever be sold? Photo: Katie Collins/PA Wire

The Business Secretary, Vince Cable, has ruled out a further sale of the remaining taxpayer stake in Royal Mail before the general election.

In an interview with ITV News he said the 30% stake in the business should be retained "for the foreseeable future."

When Royal Mail was listed on the stock market last October, 60% of the business was sold to private investors, 10% was given to staff.

No date was ever set for a sell off of the rest of the taxpayer's shares. In private the Conservatives expressed the hope it would be by the end of this parliament - that will not now happen.

Will the taxpayer stake ever be sold? Credit: Stefan Rousseau/PA Wire

The original coalition agreement, published in May 2010, committed the government to "an injection of private capital" in Royal Mail, it did not set out how much of the company would be sold. That said, very few people would have bet that, come May 2015, the government would still be the company's biggest single shareholder.

Vince Cable says he wants to be an investor on Royal Mail for the "medium to long term". He is keen to retain the stake and therefore influence over the way the company is run.

Yesterday he proved that when he doesn't agree with the direction the company takes he is prepared to say so publicly. He dismissed Royal Mail's assertion that the universal service obligation is under threat from competition as "scaremongering and special pleading."

In truth, few will be surprised by Vince Cable's decision. He's hinted at it previously and anyway this parliament doesn't have much longer to run. And then there was all the controversy.

Will the taxpayer stake ever be sold? Credit: Rui Vieira/PA Wire

The National Audit Office was deeply critical of the way the initial public offering was handled, accusing the government of selling too cheaply. Lord Myners is in the process of reviewing of how the government handles privatisations. Until he reports back any further disposal would be difficult, almost impossible.

The government sold at 330 pence, the share price immediately took off hitting a high of 615 pence in January. Since then the stock has been in gentle decline. At the open in London this morning they were changing hands for 418 pence, valuing the remaining taxpayer stake at £1.26 billion - this is money that is not heading for the Treasury before May.

Will the taxpayer stake ever be sold? It's a legitimate question. The answer will be found in the party manifestos when they are published.