Delivering his annual Mansion House speech in June 2015, Osborne unveiled plans for a £2bn sale of taxpayers’ shareholding in the Royal Bank of Scotland (RBS).
“It’s the right thing to do for British businesses and British taxpayers,” Osborne said. “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.”
This was echoed by Bank of England governor Mark Carney, who said the phased sell-off “would promote financial stability” and benefit the wider economy.
However, the chancellor has faced criticism that he should have waited for the bank to perform better. As it stands, RBS shares are trading 33 per cent lower than the government paid for them, which has incurred a loss for the government of around £1bn on the first shares.
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Amid calls from the Labour party and unions to justify the decision to sell, Osborne issued a statement in which he said: “This is an important first step in returning the bank to private ownership, which is the right thing to do for the taxpayer and for British businesses: it will promote financial stability, lead to a more competitive banking sector, and support the interests of the wider economy.
“Now is the time for RBS to rebuild itself as a commercial bank, no longer reliant on the state, but serving the working people of Britain.”
Shadow chancellor Chris Leslie said the sale had been rushed, especially as the bank is awaiting a penalty in the US over the way it sold mortgage bonds before the crisis. Last year, RBS was also fined £56m for a breakdown in its IT systems that left 6.5m customers locked out of their bank accounts for days.
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