George Osborne’s plan to sell off the Royal Bank of Scotland before the Treasury has recouped all the money it spent keeping that firm afloat is a perfect example of the silliness This Blog mentioned in an article earlier today.
The taxpayer bought an 80 per cent stake in RBS seven years ago – to the tune of a deficit-raising £45.2 billion. Now Gideon has announced that he intends to force the taxpayer to accept the loss of £7 billion while he gives the bank away to “major investors” for a song.
This demonstrates perfectly Osborne’s failure to understand that government operates like a large business, and that investments such as RBS create debts that must be recovered before any sale should be considered.
How will Osborne compensate for the £7 billion loss he is forcing on us? He’ll clamp down on payments to the poor. Meanwhile the rich will have gained a lucrative asset at a knockdown price and will go on to reap profits from it – profits that would reside more appropriately in the UK Treasury.
The poor will pay twice while the rich will take the cash.
It’s nothing less than an institutionalised con trick, with the taxpayer as the victim.
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