NatWest’s share sale by the UK government has been thrown up in the air as it shifts into full election campaigning mode.
With the Tories a country mile behind in the polls, it’s unlikely the Conservative Party will have the chance to push forward with the plans. It will be down to Labour to decide on the best course of action for the UK public’s holding of NatWest.
The scheme, together with a new ‘British ISA,’ was part of the Conservative plan to boost the general population’s involvement in stock markets.
The UK has well-received past privatisation schemes, with 25% of people surveyed investing in a privatised company between 1970 and 2014, according to a study by Opinium and Hargreaves Lansdown.
However, just 21% of these people continued to build a wider portfolio, suggesting that privatisation schemes have a limited impact on people’s ongoing involvement in listed equities.
“The NatWest share sale, announced by Chancellor Jeremy Hunt, has been put on ice, due to the General Election campaign. The Spring Budget 2024 set out that a sale would take place this summer at the earliest, subject to supportive market conditions and achieving value for money for the taxpayer. But now the retail offer will not happen during the election period,” said Susannah Streeter, head of money and markets Hargreaves Lansdown.
“Schemes like this have the power to encourage new investors, so it’s hoped this will be revisited by whoever wins the election.
“Past privatisation schemes, brought in newcomers and super-charged investing habits for many novice shareholders, but others refrained from dipping their toe further into the market, and heightened interest in the stock market ebbed away during following years.”
The UK needs to dramatically improve financial literacy, and such share schemes can help inclusion.
Among the measures outlined by the Conservative government, plans for an additional £5,000 ISA allowance to invest in British companies were met with greater scepticism by the industry. Interestingly, Labour is reported to be keen to push forward with the British ISA.