Wednesday, June 10, 2015

Taxpayer to lose £7.2BILLION as Osborne announces plan to start selling off stake in Royal Bank of Scotland

  • Chancellor announced plan to start disposing of stake in troubled bank
  • Sell-off will take place in stages with initial sales going to City institutions 
  • Shares could eventually be offered to public in 1980s-style privatisation
  • Decision to sell at a loss is likely to revive public anger over the bailout
The taxpayer’s massive stake in Royal Bank of Scotland is to be sold off at an estimated £7 billion loss, George Osborne announced tonight.
The Chancellor used his annual Mansion House speech in the City to confirm that the sale of the crippled bank will begin within months.
Some of the shares could eventually be offered directly to the public in a 1980s-style privatisation. But initial sales will go to big City institutions. The sell-off will be done in stages over a number of years.

Chancellor George Osborne, Lord Mayor of London Alan Yarrow, Lady Mayoress Gilly Yarrow and Governor of the Bank of England Mark Carney attend the dinner at Mansion House on Wednesday night
Chancellor George Osborne, Lord Mayor of London Alan Yarrow, Lady Mayoress Gilly Yarrow and Governor of the Bank of England Mark Carney attend the dinner at Mansion House on Wednesday night
Mr Osborne, Mr Yarrow, and Mr Carney arrive for the Lord Mayor's Dinner, where the Chancellor confirmed the sale of the crippled bank will begin within months
Mr Osborne, Mr Yarrow, and Mr Carney arrive for the Lord Mayor's Dinner, where the Chancellor confirmed the sale of the crippled bank will begin within months
Good spirits: The Chancellor at the dinner
Mr Osborne spent time speaking to Mayor Alan Yarrow
The Chancellor appeared in good spirits at the dinner and spent time speaking to Lord Mayor Alan Yarrow
Mr Yarrow, left, and Mr Osborne take part in the procession into the main hall of Mansion House
Mr Yarrow, left, and Mr Osborne take part in the procession into the main hall of Mansion House
The decision to sell at a loss is likely to revive public anger over the bailout.
But the Chancellor tonight said it was in the best interests of both the bank and the wider economy to get RBS off the government’s books.
Mr Osborne said: ‘It’s the right thing to do for British businesses and British taxpayers. Yes, we may get a lower price than Labour paid for it.
‘But the longer we wait, the higher the price the whole economy will pay. And when you take the banks in total, we’re making sure taxpayers get back billions more than they were forced to put in.
‘From bailing out the banks to bringing them back from the brink, 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.’
The decision was backed by Bank of England Governor Mark Carney and by a Treasury-commissioned report by merchant bank Rothschild.

BUT AT LEAST OSBORNE AIMS TO RUN A SURPLUS (WHICH IS NO EASY TASK)

By Alex Brummer, City Editor for the Daily Mail
It goes without saying that budget surpluses – when the Government spends less in a year than it collects in taxes – must be a good thing. Every household likes to get to the end of the week, month or year with a little cash behind the mantelpiece clock for an unexpected emergency.
So George Osborne’s pledge to introduce legislation which requires the Government to deliver surpluses to help pay down the national debt is highly laudable.
But since the Second World War, there have only been 11 years when the nation has been in surplus – with Churchill’s government of the 1950s, Mrs Thatcher’s in the late 1980s and the Blair/Brown government in its first three years in office, when it stuck with Tory spending ceilings.
Swings in the economic cycle make it hard for Western democracies to stay in surplus for any length of time. Mr Osborne has given himself an escape route by asking the Office for Budget Responsibility to rule when it will be acceptable to place the rule to one side. Sweden has had a budget surplus law since the 1990s. And the US briefly managed surpluses under Clinton.
Politically, one can see the attraction for the Government. It puts the anti-austerity opposition parties on the back foot. 
But by insisting on a surplus Osborne is creating a straitjacket for himself and his successors. At a time of uncertainty, from the Middle East to Greece, even the best-laid budget plans could be knocked off course.
Governor of the Bank of England Mark Carney and Lady Mayoress Gilly Yarrow join the procession
Governor of the Bank of England Mark Carney and Lady Mayoress Gilly Yarrow join the procession

The decision to sell the government stake in RBS comes as shares are trading at around £3.50, well below a peak of almost £6 five years ago some £55 per share before the financial crash
Mr Carney said the sale would ‘promote financial stability, a more competitive banking sector, and the interests of the wider economy’ while avoiding ‘considerable net costs to taxpayers of further delaying the start of a sale’.
RBS was bailed out by the taxpayer in 2008 after former chief executive Sir Fred Goodwin led it to the brink of collapse.
The Labour government bought a 78 per cent stake at a total cost of £45.8 billion.
The Rothschild report states that the current value of the stake is just £32.4 billion, implying a total loss of £13.4 billion. But the report says RBS has paid fees and dividends totalling £6.2 billion, taking the likely loss to £7.2 billion.
The estimated loss is equal to about £240 for every taxpayer in the country.
But the Treasury said it expected to make an overall profit on the taxpayer’s involvement in bank bailouts.
At the height of the banking crisis, taxpayers injected a staggering £107.6 billion into propping up the banks. Big beneficiaries included Lloyds, RBS, Northern Rock and Bradford and Bingley.
The Rothschild report suggests taxpayers could ultimately make a surplus of £14.3 billion on the investment, even after the RBS loss is taken into account.
At the time of the bailouts, experts warned taxpayers could lose anything up to £50 billion.
Britain’s banking system came close to total meltdown when RBS collapsed in 2008.
Mr Osborne wants to run a surplus by 2018/19 and will say governments should be bound by a new requirement to run an overall surplus in the public finances in 'normal times'
Mr Osborne wants to run a surplus by 2018/19 and will say governments should be bound by a new requirement to run an overall surplus in the public finances in 'normal times'
Mr Goodwin, nicknamed ‘Fred the Shred’, drove the bank to an immense size with a string of ambitious takeovers, including a disastrous deal to buy the Dutch bank ABN Amro, which sparked the downfall of RBS. 

VICTORIAN COMMITTEE ON DEBT IS REVIVED BY GEORGE OSBORNE

The Committee of the Commissioners for the Reduction of the National Debt last met in 1860
The Committee of the Commissioners for the Reduction of the National Debt last met in 1860
A committee on tackling national debt which has not met for 150 years is to be revived.
The Committee of the Commissioners for the Reduction of the National Debt is to formally meet again under George Osborne's plan to deal with the deficit.
It was set up by William Pitt the Younger in 1786 to repair the national finances after the Napoleonic wars.
The commissioners include the Chancellor, the Governor of the Bank of England, the Commons Speaker and the Lord Chief Justice.
The banker, who was close to Gordon Brown, walked away with a £700,000 pension, which he eventually agreed to halve, but was stripped of his knighthood in 2012.
The giant bank’s share price collapsed from more than £10 a share in January 2007 to just 50p in December 2008. The then Chancellor Alistair Darling purchased the taxpayer’s stake at a price of about £5 a share. Last night RBS shares closed at £3.51.
Some in the Treasury believe Labour paid too much for the shares, but Mr Darling has defended the move in the past, saying Britain’s entire banking system would have collapsed if he had not intervened.
Mr Osborne said it was better to start selling off the bank now rather than ‘hoping against hope’ that the share price will rise above the price paid.
He said: ‘Frankly, in the short term the easiest path for the politician is to put off the decision and leave it to someone else at some future time to pick up the pieces.
‘I’m not interested in what’s easy – I’m interested in what’s right.
‘I was not responsible for the bailout of RBS or the price paid then for shares bought by the taxpayer: but I am responsible for getting the best deal now for the taxpayer and doing whatever I can to support the British economy.
‘There is no doubt that starting to sell the government’s stake in RBS is the right thing to do on both counts.’
Treasury sources believe the bank has stabilised sufficiently to survive on its own, and say it will perform more effectively as a fully commercial operator. 
They believe that starting the sale now could spark interest that will drive the price higher for future sales, reducing the taxpayer’s losses. 

Read more: http://www.dailymail.co.uk/news/article-3118684/George-Osborne-announces-plan-sell-RBS-stake-costing-taxpayer-7-2BILLION.html#ixzz3chPoeoXe

NWN: We have no Vlad Putin to jail the oligarchs who fleeced Russias assets. Here in the UK they are all in it together. 

10 comments:

Henry said...

Osborne is a lunatic on a mitzvah. Every day he comes up with a 'bright' idea and every day Britain grows a little darker.

Bedroom Tax inventor Lord David Freud (Fraud) 'persuaded' the drunk, Boris Yeltsin, to sell off Russian wealth to Jew oligarchs. And his father 'persuaded' German industrialists to reveal that Zyklon Bug spray had killed 6 million family members in crude gas chambers the size of working class living rooms.

See Walter Freud: http://en.wikipedia.org/wiki/Walter_Freud

Go figure you Schmucks...

JiB said...

When one reads about the scum that run Britain's finances one wonders if there will ever be a sustained recovery.
JiB

PS I see that the Royal Navy is now employed rescuing nognogs out of the Mediterranean Sea and taking them to Sicily.

Anonymous said...

Ministers treating unemployment as mental problem - report


http://www.bbc.co.uk/news/uk-politics-33060794#_=_

Anonymous said...

Meria with Gilad Atzmon-The Wandering Who? Jewish Identity Politics.


http://meria.net/2012/04/meria-with-gilad-atzmon-the-wandering-who-jewish-identity-politics/

Anonymous said...

Nikos Michaloliakos: Greece is a Boulder Filled with Thousands of Years of Honor.


https://www.youtube.com/watch?v=PMDJuMMAZ5o

Anonymous said...

Truth about Israeli Attack on USS Liberty Contained due to Zionsit Control over Congress.


http://english.farsnews.com/newstext.aspx?nn=13940317001372

Anonymous said...

German Banker: Obama Is Destroying Europe.


http://www.globalresearch.ca/german-banker-obama-is-destroying-europe/5454736

Anonymous said...

Muslims in the Arctic Circle urgently coming up with new rules for forthcoming Ramadan when they are banned from eating during the day… as the region will have 24-hour sunshine
Ramadan, when Muslims fast until sunset, begins on June 18 this year
But three days later is summer solstice, with 24 hours sunshine in Arctic
Swedish Muslim associations are rewriting rules to accommodate the light


Read more: http://www.dailymail.co.uk/news/article-3120466/Muslims-Arctic-Circle-urgently-coming-new-rules-forthcoming-Ramadan-banned-eating-day-region-24-hour-sunshine.html#ixzz3cnDJxJPP

Anonymous said...


http://www.belfasttelegraph.co.uk/news/world-news/imf-data-shows-icelands-economy-recovered-after-it-imprisoned-bankers-and-let-banks-go-bust-instead-of-bailing-them-out-31292885.html

So did your MP attend the HoC debate 20/11/2014 on Money Creation and Society?
Nope, they know which side their "bread" is buttered.

Anonymous said...

Teachers call for early exams to avoid Ramadan could even give fasting students more marks

THE timing of GCSE, A-level and university exams could be brought forward under controversial plans so they do not clash with the Islamic month of Ramadan.


http://www.express.co.uk/news/uk/469045/Teachers-call-for-earlier-exams-to-avoid-Ramadan-in-controversial-new-plans?_ga=1.209892821.1773520255.1434099262

Has it come to this ? What NF marches used to look like............