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Osborne plans RBS shares giveaway before election

Osborne: state ownership of RBS shares politically 'untenable'. Picture: Getty

Osborne: state ownership of RBS shares politically 'untenable'. Picture: Getty

GEORGE Osborne was yesterday said to be considering a mass giveaway of the government’s shares in the Royal Bank of Scotland before the next general election.

Reports suggested that taxpayers would each receive a pre-election boost of several hundred pounds under proposals being worked on by the Treasury to pay back those who actually financed the RBS bailout.

The amount that would be pocketed by individuals was said to be between £300 and £800. The Treasury believes that offloading the UK government’s 82 per cent stake in the bank would release £30 billion into the economy.

Yesterday, the Treasury insisted it would dispose of its stake in Royal Bank of Scotland “at the right time and in the interests of the taxpayer”, amid reports a pre-election share giveaway was under serious consideration.

Scandal-hit RBS – which is 81 per cent state-owned after a £45bn bailout in 2008 – could be ready for privatisation this year, but at present prices that would mean a huge public loss.

The Liberal Democrats have championed the idea of a share giveaway, and it is claimed that Conservative ministers are also now examining the idea of handing it back to taxpayers.

Party sources told two newspapers that the Chancellor regarded continued ownership as politically “untenable” amid Libor-fixing and other scandals and was keen to end the state’s role soon.

They said economic secretary to the Treasury Sajid Javid had been tasked with drawing up options, and that giving everyone in the country shares worth £300-£400 would be a vote winner and stimulate the economy.

“One of the options, of course, could be to put it in our manifesto – but then Labour could do that as well,” they were quoted as saying. “Wouldn’t it be much better if voters were getting a cheque for £400 a few months before election day? It would also be a very big stimulus.”

Short of a giveaway, shares could be offered to the public at a discount.

The Treasury insisted that no decisions had been taken and that its aim remained to return RBS to the private sector “at the appropriate moment” and with the best possible outcome for the taxpayer.

Business Secretary Vince Cable said earlier this month that while there was “no immediate prospect” of a giveaway, “my party has advocated that option and we want to keep that option alive”.

A spokesman for First Minister Alex Salmond said: “Only the Tories would aim to bribe people with their own money. Scotland and its taxpayers are already entitled to a fair share of the assets of RBS and other shared UK institutions, but if the argument is being made that we should not get our fair share of these assets, then equally we would not have to take our share of liabilities, including the UK’s national debt.

“Scotland is already subsidising Westminster to the tune of £500 a year, every year, for every man, woman and child in Scotland, as the official figures show.”

He added: “In any case, this appears little more than a half-baked Tory kite-flying exercise.”

 

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