- Rachel Reeves confirmed NatWest retail share sale will not go ahead
- It had been thought the share sale would take place in June
The Chancellor has officially scrapped the retail sale of the Government’s remaining stake in NatWest.
In a speech given this afternoon, Rachel Reeves confirmed the retail sale of the Government’s £5.6billion stake will be cancelled and it will instead be sold privately in 2025.
Reeves said the discounts on shares would cost ‘hundreds of millions’ and it was a ‘bad use of taxpayers money’.
Scrapped: Rachel Reeves confirmed that the government will scrap the retail sale of its NatWest stake
The planned retail share sale was announced by Jeremy Hunt the former Chancellor at the Autumn budget last year.
The Conservatives planned a sale and primed M&C Saatchi to launch a ‘Tell Sid’ advertising campaign – the slogan used to encourage people to buy shares in British Gas in 1986.
NatWest last week revealed it had already spent £24million on an aborted campaign and fees.
It had been hoped that the retail sale of NatWest would be an opportunity to encourage more people to develop long-term saving and investment habits.
Sarah Coles, head of personal finance at Hargreaves Lansdown, said: ‘The news that retail investors will be frozen out as NatWest shares are sold off is bitterly disappointing.
‘Retail investors are all too often overlooked and yet they are important backers of UK companies, holding a greater proportion of their assets in the UK compared to the likes of pension funds.’
Danni Hewson, AJ Bell’s head of financial analysis said: ‘Ditching a retail offer for NatWest was expected.
‘Offering up what’s left of the governments stake in the bank in a ‘Tell Sid’ style campaign would undoubtedly have come with a significant discount, a discount that looks to be unnecessary considering the bank’s recent performance and the interest in snapping up the shares by institutional investors.
‘Whilst protecting the taxpayer is understandable and even laudable, the share sale could have been used as a valuable catalyst to get first time investors on board.’
‘Creating a teaching moment that could have changed the investing landscape for the better.’
The last Labour government rescued the stricken lender during the 2008 financial crisis and at its peak the taxpayer’s stake was 84 per cent.
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