RBS to be sold at loss

Chancellor George Osborne has announced the Government will sell its 80 per cent stake in the Royal Bank of Scotland. 

The taxpayer is expected to make a big loss on the sale, with the current share price of 354p compared to the 500p price at purchase, when the last Labour government bailed the bank out for £45.8bn in 2008 and 2009 during the financial crisis.

Speaking during his traditional Mansion House speech to the City, Osborne said: “It's the right thing to do for British businesses and British taxpayers. Yes, we may get a lower price than that was paid for it - but we will get the best price possible. For the longer we wait, the higher the price the whole economy will pay.”

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Governor of the Bank of England Mark Carney said: “Public ownership has largely served its purpose. It prevented enormous financial contagion at a time when the UK financial system was extremely fragile.”

The move will represent Britain’s biggest privatisation ever, expected to make around £32bn for the treasury, but critics have said the Chancellor is driven by the ideology that private is better than public.

The think-tank New Economics Foundation described the sell-off as the "reckless fire-sale of a vital economic asset".

RBS's chief executive, Ross McEwan, said: "I welcome this evening's announcement from the chancellor and we are pushing ahead with our strategy to build a simpler, stronger, fairer bank that is totally focused on the needs of its customers and centred here in the UK.”

The SNP criticised Osborne for not announcing the plans in parliament. Finance spokesman Stewart Hosie said "George Osborne should have made this announcement to the House of Commons, not at a dinner in London.

"The Chancellor's main concern should be providing a good deal for the public and ensuring taxpayers receive what they are owed."