Critics slam ‘anti-capitalist’ Labour for axing NatWest sell-off plan

Critics have slammed Labour for binning NatWest’s share sale.

They argued it was a once in a generation opportunity to encourage the public to buy stock.

It has been branded a missed chance to encourage the public to develop investment habits and to reinvigorate the London market.

This week Chancellor Rachel Reeves confirmed that there will not be a ‘Tell Sid’ NatWest share to the public as it would cost the taxpayer too much. 

She will instead offer the Government’s £5.6billion stake to pension funds, insurers and asset managers.

Under fire: Chancellor Rachel Reeves confirmed that there will not be a ‘Tell Sid’ NatWest share to the public

Former Chancellor Jeremy Hunt said: ‘The public share sale would have widened share ownership and boosted the London stock market – so much for believing in spreading wealth and prosperity.’

Former cabinet minister Jacob Rees-Mogg added: ‘This is a reminder that Labour is an anti-capitalist party which does not want to see the spread of wealth or to support London’s capital markets.’

A retail share offer would involve having to offer the public discounts worth hundreds of millions of pounds. Reeves said on Monday: ‘It would therefore not represent value for money, and it will not go ahead.’

According to estimates published by the Treasury this week, axing the sale would save between £100million and £450million. The lender had been bailed out by the Government during the 2008 financial crisis, the last time Labour was in power.

At its height, the taxpayer’s stake was 84 per cent. Critics argue that as taxpayers have held up the bank for so long, it is only right they are offered a discounted opportunity to own slices of it. 

Mark Northway, from not-for-profit investment group ShareSoc, said he was ‘very disappointed’ by this ‘missed opportunity.’

‘Shareholders, including individuals, took the pain at the point of the Government rescue. The individual taxpayer has funded the recovery over the past decade and a half.

‘Here was an opportunity to allow individual investors to participate in the next chapter on par with institutional investors, but the new government has chosen to favour the financial services industry.’

And the group believe the sale could have been used by schools to teach lessons around responsible finances.

Danni Hewson, head of financial analysis at broker AJ Bell, said: ‘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. 

According to estimates published by the Treasury this week, axing the Natwest sale would save between £100m and £450m

Creating a moment that could have changed the investing landscape for the better would have been exciting.’

This month the Government’s stake fell below 20 per cent.

The Conservatives planned a sale this summer, with former chancellor Jeremy Hunt priming ad agency M&C Saatchi to launch a ‘Tell Sid’ advertising campaign – the slogan used to encourage the public to buy shares in British Gas in 1986.

But NatWest last week said it had to spend £24million on a campaign, which never saw the light of day. 

In the planned advert, broadcaster Sir Trevor McDonald asked the public in a TV campaign that aimed to boost the beleaguered stock market: ‘Are you in?’

A NatWest spokesman said: ‘Any decisions around the sale of government shares are a matter for the Treasury.

‘We are pleased with the continued reduction of the Government’s stake, which has almost halved this year and is now below 20 per cent.

‘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.’

But Chris Beauchamp, chief market analyst at investment platform IG, said it was ‘inevitable’ that Labour kiboshed the sale due to Natwest’s booming share price.

He added that ‘the tide is going back the other way to more public ownerships with the railways, and you could make an argument for other utility companies too. There is a sense things haven’t worked’.