Wednesday 16 November 2016 4:30 pm

The government’s decision to cancel a retail offering of Lloyds shares is an outrage

Lloyds Banking Group will bring up mixed emotions for the British public. On the one hand, it still represents a symbol of the financial crisis, and the subsequent pain and aftershocks that brought for Britain. On the other, it is a household name, present on our high streets and safely nestled on the FTSE 100.

At the height of Lloyds’s woes, the taxpayer provided a whopping £23bn to part-nationalise the bank, taking a 43 per cent share ownership. So far, the government has managed to recoup nearly £17bn of this.

The government has now announced it is ready to press ahead with selling the final 9 per cent stake, marking the last stage of a long, torrid, and expensive process for the taxpayer.

All through this, ex-chancellor George Osborne had pledged that retail investors – everyday UK citizens who had contributed to the bailout through their taxes – would get a chance to get a slice of the pie, by investing in the bank as it was privatised.

However, this has all changed. Chancellor Philip Hammond, blaming “market volatility”, has made a u-turn on his (elected) predecessor’s pledge, through the announcement of a trading plan that sells Lloyds shares solely to institutional investors.

This has sparked fury throughout the investment community, from the brokers who were hoping to handle the sale, to the thousands of retail investors who had already registered their interest in the shares.

Read more: The government's Lloyds sale ignores its primary duty: The public

At SyndicateRoom, we had significant investor interest in the Lloyds Banking Group share sale. The government has decided that investing in a bank – that retail investors already feel that they have a stake in – is not a decision that retail investors are capable of making.

Rather, at a time when the disengagement between the general public and big business is being most sorely felt, and most brazenly displayed, Hammond is failing to help democratise investment by letting everyday taxpayers make their own investment decisions.

Surely the quid pro quo of the taxpayer bailout was an opportunity down the line for ordinary people to stand a chance at reaping some of the reward.

With decimated interest rates, a fall in sterling, and inflation on the horizon, the government should be encouraging more everyday people to become retail investors. And what better way to engage individuals in investing and share ownership than through a sale of a household name, with the prospect of a steady, long-term return? If the government does not facilitate primary capital offerings to retail, what signal does that send to other issuers?

Read more: The Bank’s response to stagflation will be a key test of its credibility

SyndicateRoom was founded on the principles of democratising retail investment. We have broken ground by facilitating retail investors’ access to public placings on the same terms as institutional investors.

The decision regarding Lloyds’s trading plan goes against everything we stand for. Moreover, the government is failing to capitalise on untapped retail investor demand that exists. We have had significant interest from our members who feel let down, even angry, not to have been allowed the opportunity to invest.

Lloyds is supposed to be “For the journey”. Right now, the only message the government is sending is that, once again, investing is a journey that further advantages the privileged few.

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.