RBS - Tories Desperate

Now that many of those involved have left the political scene - Pa Broon and Alistair Darling both stood down last month - the dark days of the 2008 financial crisis seem a long way away. That, and a desperation to raise some cash, may be what caused the Rt Hon Gideon George Oliver Osborne, heir to the seventeenth Baronet, to announce yesterday that he was to begin selling off the Government’s stake in RBS.

That stake was left well alone during the Coalition years, and for good reason: it was purchased at around £5 a share, and the market value of those shares had not recovered to anything like that level. Also, inflation needed to be taken into account. So it might be expected that no sale would take place until the taxpayer could get, say, £6 per share, and therefore be sure of recouping the cost - in full.

But that expectation will remain unfulfilled: Osborne will begin selling the Government’s stake in RBS while the share price is still way short of what was paid - last night’s mark was just short of £3.55. What that means for the taxpayer is that they will be out of pocket by a cool £7.5 billion. Those who may suffer from the £5 billion cut in child tax credits that is currently under discussion may find that interesting.

On top of that, Osborne is selling off half the Government’s remaining share in Royal Mail, which only heightens the mood of desperation. If further swingeing cuts to spending are only being kept at bay by flogging state assets, what happens when there are no more of those assets left to flog? Perhaps our free and fearless press would like to comment? Are they on the Chancellor’s case? Well, not as such.

The slavishly Tory-supporting Telegraph is at least conceding that taxpayers will make a loss on the first sale of RBS shares, telling “Osborne swallows loss of £7bn in RBS sell-off”. He didn’t look too put out by that last night at the Mansion House, though, did he? But, as Clive James might have said, I digress. The Murdoch Times was in full spin mode, with “Osborne to cut losses with £32bn sale of RBS”. No mention of how big the loss would be.

And the Murdoch Sun, while not fixated on Yet More Boobs, told readers with jaw-dropping brass neck that this meant “Bank sell-off £14bn profit”. That’s just crap. What does shadow Chancellor Chris Leslie have to say about that?

“Taxpayers who bailed out RBS want their money back in full and will rightly be suspicious of any rush to sell. When RBS is still restructuring the business, and awaiting a US settlement for the mis-selling of subprime mortgages, a premature sale poses a risk for taxpayers … It is highly dubious for the Chancellor to claim that significant losses on RBS are somehow acceptable because a gain can be made selling Lloyds or other completely separate assets”. Got it in one.

The Tories are desperate to raise cash. And our free and fearless press is looking the other way, while not asking any questions. That, once again, is not good enough.