11th June 2015
The government has said it is ready to start selling off its stake in Royal Bank of Scotland.
In his annual Mansion House speech on Wednesday night the Chancellor George Osborne announced the time was right to begin selling off the taxpayers 79% stake in the business.
The government injected £45.5bn into the embattled bank back in 2008 in bid to prop it up during the financial crisis.
The shares are set to be sold-off to City institutions in the coming months. However it is estimated that the sell will incur a £7bn loss.
The government, originally paid 500p a share for the bank, compared with the current price of around 359p.
Bank of England governor Mark Carney said the phased sell-off “would promote financial stability” and benefit the wider economy, according to the BBC.
Workers union Unite however criticised the plan, and urged that the government was “short changing the public”.
But Osborne asserted that he was “not responsible” for the bailout or the price paid but he said the shares will increase in subsequent offerings as confidence grows. He added: “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.”
The chancellor also provided further details of the sell-off of the remaining stake the government has in delivery firm Royal Mail, where workers will share another 1% between them while 15% will be placed with City investors.