Plans for a retail share sale in banking giant NatWest will be scrapped as they are a “bad use of taxpayer money”, the new Chancellor has announced.
Rachel Reeves revealed that the new Labour Government has ditched the Tory aims to launch a “Tell Sid”-style share sale of its remaining 20% stake in the lender.
The former Government had been planning to launch a share sale in NatWest to retail investors this summer, before it was put on hold due to the surprise July 4 General Election announcement.
Ms Reeves told the House of Commons: “We intend to fully exit our shareholding by 2025-26.
“But having considered advice, I have concluded that a retail share sale offer would involve significant discounts that could cost taxpayers hundreds of millions of pounds.
“It would therefore not represent value for money.”
She added: “It will not go ahead. It’s a bad use of taxpayer money and we will not do it”.
The bank – formerly known as Royal Bank of Scotland – was at one stage 84% owned by the State after a mammoth £46 billion bailout at the height of the financial crisis.
The Treasury has been selling down its stake in the lender, which also owns Coutts, as part of aims to return it fully to private hands.
NatWest has seen the taxpayer stake in the group drop to below 20% in recent weeks, down from about 38% in December, as the Government has continued to sell down its shareholding.
The former Tory government had announced plans to sell some of the stake to retail investors, in a similar share offering to the 1986 British Gas “Tell Sid” campaign to promote the sale of stock to the public after it was privatised.
It has been reported recently that Labour will instead look to offload shares in NatWest to large, institutional investors, as part of its goal to see the bank fully return to private hands by 2025-26.
NatWest last week revealed it spent £24 million on the scrapped plans after it was forced to pay for advertising and preparations for the share sale.
It is understood that some of the £24 million forked out by NatWest for marketing costs of the retail share plan can be re-used for general advertising uses, although the bill also covers legal fees and expenses.
A NatWest Group spokesman said: “We welcome the Chancellor’s commitment to returning NatWest Group to full private ownership.
“This is a shared ambition that we believe is in the best interests of both the bank and all our shareholders.”
