NatWest retail offer will not solve UK’s problems
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NatWest retail offer will not solve UK’s problems

UK Chancellor Jeremy Hunt | Photo: Reuters

For a deeply unpopular government with little room to manoeuvre, the chance to bribe voters with a cheap offer of bank shares is irresistible. The bank in question is now well-run and profitable while its stock still trades at a discount. But the great NatWest share offer will do little to revive UK capital markets.

UK Chancellor Jeremy Hunt first put the City of London on notice last November of the government’s hopes to sell down a substantial part of the 31.9% stake it still holds in NatWest through a large retail share offering.

Buyers will be able to tuck these stocks into a new British ISA, a tax-free savings account allowing an additional £5,000 annual investment in UK equities free from tax on dividends and capital gains, above the £20,000 that UK citizens can already invest in such schemes.

Trailed for weeks beforehand, the British ISA was confirmed at the budget on March 6, when Hunt also confirmed that the NatWest retail offer will come "this summer at the earliest opportunity".

The British ISA and the NatWest retail share offer are, His Majesty's Treasury says, designed to support the development of a savings and investment culture as well as the UK's wider capital markets.



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Editorial director
Peter Lee is editorial director. He joined Euromoney straight from Oxford University in 1985, and has written about banking and capital markets ever since, being appointed editor in 1999. He became editorial director of Euromoney in May 2005.
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