The Government’s sale of shares in the Royal Bank of Scotland (RBS) should be suspended whilst alternative options are looked at.
Taxpayers who bailed out RBS during the global financial crisis want to get back as much of their money as possible.
It was right for the previous Labour Government to urgently rescue RBS but the current Government does not have to sell it at the same speed. In doing so, the Government appear to be willing to take a significant loss on RBS shares. The 5% stake sold on August 3 has already realised a loss of £1 billion, and some calculations suggest that the total losses if the entire stake is sold in this way could be about £13 billion, almost a third of the £45.5 billion total cost of the bail-out.
The Government have a very poor record on getting value for money on taxpayers’ assets, as the Coalition Government’s initial fire sale of Royal Mail showed. I do not accept that the case has been made to sell the bank off now-at significant loss to the taxpayer. That is why I support a full, independent review of all the options before further shares are sold.
I believe share sales should be suspended whilst alternative options are looked at. The Government should instead engage with a real review of the banking sector and alternative models that will deliver a diversified and more resilient economy.