Plans to sell taxpayer shares in one bailed out personal and business bank account provider to sovereign wealth funds has drawn strong criticism from both Labour and the Liberal Democrats, it was recently reported.
The proposed sale of the 83 per cent taxpayer interest in the Royal Bank of Scotland to a fund based in Abu Dhabi is not the first time such a fund has been considered. In addition to the RBS sale, the Lloyds TSB stake of 40 per cent is also being shopped about to the funds, which act as investment houses for the money of wealthy states.
However, any attempt that is made to unload the shares – which are about half what they were worth when purchased by the government – will be strongly protested by Lib Dems, who have called for an approach that is more interventionist in nature. Lib Dem peer Lord Oakeshott said that taking a loss on the £45 billion investment the Government made into RBS would be an absolute disaster, adding that this selloff will be campaigned against with vigour in order to secure a better medium-term result for the bank.
Shares in RBS currently stand at approximately 27.75p. A sale at these prices would lead to a loss of £20 billion, experts say.
Labour has also urged against taking a loss on the sale in the wake of Northern Rock’s selloff. Shadow financial secretary to the Treasury, Chris Leslie, remarked that it is absolutely crucial that the taxpayer recovers their investment in the failed bank, blaming Chancellor George Osborne for the rushed selloff of Northern Rock which left the UK taxpayer taking a loss in the hundreds of millions of pounds.