Government’s shares in NatWest Group plc
I can inform the House that the Government have announced an extension to their existing trading plan to sell part of the Government’s shareholding in NatWest Group—NWG, formerly Royal Bank of Scotland, RBS. The current trading plan was due to end in August 2023. Following its strong progress to date in reducing the Government’s shareholding in NWG, the trading plan has been extended for a further two years, allowing sales to continue under the plan until August 2025. This announcement demonstrates continued progress towards the Government’s intention to return its NWG shareholding to private ownership by 2025-26.
Policy rationale
It is Government policy that, where a Government asset no longer serves a public policy purpose, the Government may choose to sell that asset, subject to being able to achieve value for money. This frees up public resource which can be deployed to achieve other public policy objectives.
The Government are committed to returning NWG to full private ownership, given that the original policy objective for the intervention in NWG—to preserve financial and economic stability at a time of crisis—has long been achieved. At spring Budget 2023, the Chancellor reiterated the Government’s intention to fully dispose of their NWG shareholding by 2025-26.
Trading plan detail
A trading plan involves selling shares in the market through an appointed broker at market value over the duration of the plan. Trading plans are an established method of returning Government-owned shares to private ownership, while protecting value for the taxpayer. This method was used in the sale of the Government’s stake in Lloyds Banking Group.
The trading plan for the Government’s NWG shareholding will be extended for two years, terminating no later than 11 August 2025. Shares are only sold at a price that represents fair value and delivers value for money for the taxpayer. The final number of shares sold will depend on, among other factors, the share price and market conditions throughout the duration of the trading plan. Since the NWG trading plan was established in August 2021 it has made significant progress in reducing the Government’s shareholding, with over £3.7 billion in proceeds raised from sales that have delivered value for money for the taxpayer.
UKGI and HMT will keep other disposal options under active consideration. The decision to extend the trading plan does not preclude the Government from using other disposal options to execute further transactions that achieve value for money for taxpayers.
[HCWS718]