The Treasury said the £2.1bn raised from the sale will be used to pay down the national debt.
It follows advice from UK Financial Investments yesterday that it would be “appropriate” to conduct the first sale of the government’s shareholding in the Royal Bank of Scotland. The Chancellor agreed with that advice and authorised the process to begin.
The Chancellor of the Exchequer, George Osborne, said: “This is an important first step in returning the bank to private ownership, which is the right thing to do for the taxpayer and for British businesses: it will promote financial stability, lead to a more competitive banking sector, and support the interests of the wider economy.
“Now is the time for RBS to rebuild itself as a commercial bank, no longer reliant on the state, but serving the working people of Britain.
“I wasn’t the Chancellor who bailed out RBS; but I am the Chancellor now responsible for doing the right thing for the British economy.
“So while the easiest thing to do would be to duck the difficult decisions and leave RBS in state hands; the right thing to do for the economy and for taxpayers is to start selling off our stake. So today that’s what we’re doing.”
Yesterday campaign group Move Your Money revealed that over 85,000 people have signed an online petition demanding that the government hold onto its share of RBS until the share price had recovered.
