John McDonnell slams 'enormous' £2.1bn loss as ministers sell off RBS shares
2 min read
Ministers have come under fire after selling £2.5bn of shares in Royal Bank of Scotland at an "enormous" loss to the taxpayer.
RBS - once the largest bank in the world - was bailed out by the last Labour government at the height of the global financial crisis.
Taxpayers forked out 502p a share to take the troubled bank into public ownership in 2008. But ministers this morning confirmed the Government had offloaded 925 million shares at just 271p each - equivalent to a £2.1bn loss on the original price paid.
Shadow Chancellor John McDonnell blasted the Government over the move, saying there was "no economic justification for this sell-off".
He added: "There should be no sales of RBS shares, full-stop. But because of this government’s obsession with privatisation, the taxpayers who bailed out the bank will now incur an enormous loss.
"Taxpayers are paying the price for the Tories’ mismanagement of RBS over the past eight years."
Liberal Democrat leader Vince Cable meanwhile hit out at the Government's decision to press ahead with the sale, saying there was "no need for the Conservatives to cost the taxpayer more than £2bn" and questioning why ministers had not done more to press for change at RBS.
"There is continuing uncertainty on a number of RBS’ legacy issues," the former business secretary said.
"Ministers should instead have been using their position as the biggest shareholder to make sure management put the bank in order so that the share price recovered before selling any of the stake."
But Economic Secretary to the Treasury John Glen said it was "unrealistic" to argue that the Government should cling on to its RBS stake until the bailout could be recouped.
He told the Today programme: "I would love it if we could sell the shares at a much higher price, obviously, that is what everyone would like to do. But we need to be realistic and look at the market conditions."
Chancellor Philip Hammond said the sale represented "a significant step in returning RBS to full private ownership and putting the financial crisis behind us".
"The Government should not be in the business of owning banks," he said. "The proceeds of this sale will go towards reducing our national debt - this is the right thing to do for taxpayers as we build an economy that is fit for the future."
Today's sell-off takes the UK's total stake in the beleagured banking giant to 62.4%. Ministers have pledged to sell £15bn worth of RBS shares by 2023.
PoliticsHome Newsletters
PoliticsHome provides the most comprehensive coverage of UK politics anywhere on the web, offering high quality original reporting and analysis: Subscribe
