George Osborne plans sale of bailed-out bank RBS to private investors at £13bn loss to taxpayers

A petition is calling for the Chancellor to consider other options

Jon Stone
Thursday 04 June 2015 22:11
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George Osborne is set to sell bailed-out bank RBS back into private hands for a £13bn loss to the UK taxpayer, economists have said.

In his speech at Mansion House next week the Chancellor is expected to announce what he will do with the publicly-owned bank, which was taken into majority public ownership in 2008.

The UK taxpayer holds an 81 per cent stake in RBS after a series of capital injections amounting to £45bn.

“Just a few months ago, Osborne was insisting we’d get our money – the £45bn spent to save RBS from collapse – back from any sale of the bank. Now, after the election, he is attempting to rush through a sale at a big loss,” said Tony Greenham, head of economy and finance at the New Economics Foundation.

“The assumption that the bank should be returned to the private sector deserves greater scrutiny and debate. We can’t make back our money by flogging off RBS – so let’s use our investment to fix the UK’s broken banking system, creating new players that genuinely work for us.”

He compared the one-off £13bn loss on the sale of the asset to the £12bn annual welfare cuts pledged by the Government’s spending plan.

The Foundation has set up a petition calling on the Chancellor not to sell the bank at a loss and to review all option.

The suggestion of using the bank to as a public investment platform comes as the OECD warns that business investment in the UK has been dangerously sluggish.

In its bi-annual report on the world economy the Paris-based organisation said stronger investment was needed to ensure UK growth did not slow.

Among suggestions made by the organisation were great access to finance to business as well as improved infrastructure, both of which could potentially be supported by an active state investment bank.

The OECD called on the government to look at “leveraging limited public resources with private investment” and also stressed contributions from private investors and regulatory reform.

Today Mr Osborne also announced that the Government would sell off its final 30 per cent stake in Royal Mail, fully privatising the company.

A Treasury spokesperson declined to comment on this story when contacted by The Independent.

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