A general election that was held earlier than expected has cast doubt on UK government plans for a mass public sale of NatWest share.
Rishi Sunak (UK Prime Minister) announced on Wednesday that an election would be held on July 4. This marked the beginning of a “heightened sensitive” period, during which government officials and civil servants will have to exercise caution when making decisions which could impact the election campaign.
This move will likely prevent the Treasury from launching the highly anticipated share sale for the government-backed Bank, which was saved by the previous Labour government with a £46bn rescue at the heights of the financial crises.
Chancellor Jeremy Hunt pledged to launch a mass campaign this summer, as part of a push to create a “new generation of retail investor” ahead of the expected autumn general election.
According to the plan for a retail sales, the state shares in NatWest were offered at a discounted price, and a separate sale was conducted to institutional investors.
The government reduced its stake to 84 percent by selling shares. In March, it ceased to be the controlling shareholder and now owns about 27 percent of NatWest shares.
The retail offer was attacked by critics who argued it was a politically motivated and expensive venture that prompted the bank’s selection of its chief executive. A permanent chief is widely seen as necessary before the sale.
Dame Alison Rose resigned as its CEO last year after a scandal of “debanking”, sparked by Coutts’ elite private bank cutting ties to Nigel Farage, former leader for the Brexit and UK Independence party.
The bank announced in February that it had appointed interim boss Paul Thwaite as a permanent employee, following his appointment to lead the company in July. Six weeks prior to his permanent appointment, the search process was only launched.
Since then, the government has been preparing to sell retail shares. M&C Saatchi was appointed to launch a national campaign.
The sale was intended to mimic the “Tell Sid”, advertising campaign from the 1980s, when Margaret Thatcher offered discounts to the public in privatisations like British Gas.
The move was part of a larger government effort to increase the appeal of UK equity alongside other projects, including a British Isa.
NatWest and Treasury declined to comment.
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