James Moore: The dangers in an RBS sell-off to Abu Dhabi

Outlook The "revelation" that talks are under way between the UK and Abu Dhabi over the possibility of the Gulf state buying part of Royal Bank of Scotland look to be driven as much by internal BBC politics as they are by an imminent deal. Look, look we can do business stories too, Newsnight was saying, by picking up a rumour of the State's interest and then declaring advanced negotiations to be under way with an announcement due by, erm, Christmas. Maybe.

So in fact these talks are about as advanced as a steam-driven car with square wheels.

The story has been given some extra legs by the fact that it appears that the government of Abu Dhabi is involved directly rather than its various sovereign funds and that Amanda Staveley, the banker who helped get Barclays out of a hole with the help of lots of Middle Eastern cash, is advising.

But in the real world it would be news if UK Financial Investments, which stewards the state's interest in the banking sector, wasn't talking to potential buyers everywhere and anywhere.

UKFI's role, to keep the Government at arm's length from a banking sector it has billions of pounds of taxpayers' money invested in and to eventually oversee its sale, is essentially a fiction. Ministers have already proved that they can and will intervene in the running of the nationalised banks where there is political capital at stake.

However, UKFI still has a staff and they do have to find something to occupy themselves with, so sizing up buyers isn't a bad idea.

There is even some support in the City for an early sale and some semi-sensible arguments for one too. Even if it would be loss making for the taxpayer such a move would at least broaden the the range of RBS's investors and make it look more like a "normal" company which, with over 82 per cent of its shares in government hands, it can't be considered right now.

However, quite apart from the anger such a move would generate with the public – "they're letting their mates in the City take us for a ride again" – it would also be dangerous, if not foolhardy.

If you show the market you are willing to sell your assets cheap once then the market will expect you to do it again. And again. So ultimately you will never realise their true value.

Ms Staveley is well aware of that fact. Vince Cable and George Osborne ought to be.


Start your day with The Independent, sign up for daily news emails
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Editor-in-chief - Financial Services - City, London

£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Guru Careers: Management Accountant

£27 - 35k + Bonus + Benefits: Guru Careers: A Management Accountant is needed ...

Guru Careers: Project Manager / Business Analyst

£40-50k + Benefits.: Guru Careers: A Project Manager / Business Analyst is nee...

Day In a Page

General Election 2015: ‘We will not sit down with Nicola Sturgeon’, says Ed Balls

'We will not sit down with Nicola Sturgeon'

In an exclusive interview, Ed Balls says he won't negotiate his first Budget with SNP MPs - even if Labour need their votes to secure its passage
VE Day 70th anniversary: How ordinary Britons celebrated the end of war in Europe

How ordinary Britons celebrated VE Day

Our perception of VE Day usually involves crowds of giddy Britons casting off the shackles of war with gay abandon. The truth was more nuanced
They came in with William Caxton's printing press, but typefaces still matter in the digital age

Typefaces still matter in the digital age

A new typeface once took years to create, now thousands are available at the click of a drop-down menu. So why do most of us still rely on the old classics, asks Meg Carter?
Discovery of 'missing link' between the two main life-forms on Earth could explain evolution of animals, say scientists

'Missing link' between Earth's two life-forms found

New microbial species tells us something about our dark past, say scientists
Ronald McDonald the muse? Why Banksy, Ron English and Keith Coventry are lovin' Maccy D's

Ronald McDonald the muse

A new wave of artists is taking inspiration from the fast food chain
13 best picnic blankets

13 best picnic blankets

Dine al fresco without the grass stains and damp bottoms with something from our pick of picnic rugs
General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

On the margins

From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'
Sarah Lucas is the perfect artist to represent Britain at the Venice Biennale

Flesh in Venice

Sarah Lucas has filled the British pavilion at the Venice Biennale with slinky cats and casts of her female friends' private parts. It makes you proud to be a woman, says Karen Wright
11 best anti-ageing day creams

11 best anti-ageing day creams

Slow down the ageing process with one of these high-performance, hardworking anti-agers
Juventus 2 Real Madrid 1: Five things we learnt, including Iker Casillas is past it and Carlos Tevez remains effective

Juventus vs Real Madrid

Five things we learnt from the Italian's Champions League first leg win over the Spanish giants
Ashes 2015: Test series looks a lost cause for England... whoever takes over as ECB director of cricket

Ashes series looks a lost cause for England...

Whoever takes over as ECB director of cricket, says Stephen Brenkley
Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected