Britain to fully privatise postal service to slash debt

Britain's newly-elected government on Thursday outlined plans to sell off its remaining stake in the Royal Mail as part of efforts to cut state debt by £4.5 billion ($6.9 billion, 6.1 billion euros).

A month after Prime Minister David Cameron's Conservatives won a general election, the Treasury said the postal service sell-off would provide a "major boost" in debt-cutting this year.

Sale of the government's 30-percent stake in Royal Mail is expected to earn the state about £1.5 billion, the Treasury said in a statement.

Finance minister George Osborne has also ordered a £500-million cut to the defence budget, while the education department must reduce spending by £450 million, health by £200 million and the justice department by £249 million.

"I am today announcing that the government will begin selling the remaining 30 percent shareholding we have in the Royal Mail," Chancellor of the Exchequer Osborne said.

"Reducing the deficit -- that is how you deliver lasting economic security for working people. For as everyone knows, when it comes to living within your means, the sooner you start the smoother the ride."

The previous Conservative-Liberal Democrat coalition government had already slashed government spending by billions of pounds in a bid to cut Britain's hefty deficit that ballooned following the 2008 financial crisis.

The current government has promised to eliminate the deficit by 2019 but has yet to outline proposed welfare cuts of £12 billion.