Daily Mirror (Northern Ireland)
Taxpayers lose another £3bn on RBS sell-off
Labour fury over Hammond plan
TAXPAYERS face losing more than £3billion under Tory plans to sell a slice of the bailed-out Royal Bank of Scotland.
The Government last night announced it aims flog another 7.7% of RBS to big City firms this week.
A sale is expected to bring in around £2.6billion but the huge loss involved was savaged by Labour.
The Government will receive only around 281p a share, way less than the 502p which the Labour Government paid to save RBS from collapse in the 2008 financial crisis.
A National Audit Office report last year said that once financing costs are factored in, the real break-even point is 625p. A sale at 281p means losing £3.2billion. The plan was approved by Chancellor Philip Hammond following official advice. Most of the firms which buy the shares will remain a secret.
Labour Shadow Chancellor John Mcdonnell said: “There is no economic justification for this sell-off. There should be no sales of RBS shares, full-stop. But particularly with such a large loss to taxpayers who bailed out the bank.
“Taxpayers are paying the price for the Tories’ mismanagement of RBS over the past eight years.”
The public stake in RBS will be cut from 70.1% to 62.4% with more sales expected. RBS recently agreed a £3.6billion settlement with US regulators over past wrongdoing.
Laith Khalaf, of brokers Hargreaves Lansdown, said the share price had bounced back but the taxpayer will still be “significantly out of pocket”.
James Price, of the Taxpayers’ Alliance, backed the sale, saying: “The remaining shares should also be sold as quickly as possible, so bankers assume the risk, not the public.”
The only previous sale of RBS shares, in 2015, left the public nursing a £1.9billion loss, said the NAO.
RBS, along with other major High Street banks, has been slammed for closing much-needed branches.