Question to the HM Treasury:

To ask Mr Chancellor of the Exchequer, for what reason a 10 pence discount on the market closing price was offered to institutional investors purchasing RBS shares from UK Government Investments on 4 June 2018.

The Government’s shareholding in the Royal Bank of Scotland (RBS) is managed at arm's length and on a commercial basis through UK Government Investments Ltd (UKGI), a company which is wholly owned by the Government, with the objective of creating and protecting value for the taxpayer.

On 5 June 2018 the Government concluded a second sale of its shareholding in RBS, restarting the phased return of the bank to full private ownership. The Government sold approximately 7.7% of the bank (925m shares) through an overnight accelerated bookbuild (ABB) process, raising just over £2.5bn for the taxpayer (at a price of 271p per share). This reduced the government shareholding to 62.4% (from 70.1% pre-sale).

UKGI advised that an ABB would be the most appropriate method for restarting the RBS sale programme. It is usual market practice for ABB sales to price at a small discount to the closing market price. This is necessary to enable the sale of a large number of shares in a single transaction, with recent discounts on large ABBs ranging between 2% and 6%. The Government takes account of this discount when considering the value for money of a transaction, given it is a usual feature in such large transactions.