London, United Kingdom (NI) – On Tuesday morning, BBC radio’s flagship ‘Today’ programme reported the start of the (re)privatization of Royal Bank of Scotland (RBS) in Britain, saying that ‘absolutely no-one opposes it’.
The interim leadership of the Labour opposition may not. Conservative ministers (like their Labour predecessors in 2008) may mouth banalities about the ‘best interests of the wider economy’.
But I for one oppose it, and I bet I’m not alone.
For a start, when the Labour government bailed out RBS in 2008 the public paid nearly $70 billion for the privilege of landing itself with ‘austerity’. That $70 billion is now (according to financial markets) ‘worth’ $50 billion at most.
The implication of selling off even the 5 per cent of the government’s shareholding currently on offer is that the public should be content to shoulder a loss of at least $20 billion, even without considering how $70 billion might have been put to better use in the intervening years.
That more than covers the cuts in ‘welfare’ and other public services currently inflicted on millions of people – the ‘savings’, in effect, transferred to the City of London instead.
It’s a safe bet that these millions of people do not include the cabal of City bankers who will be collecting lavish fees for the process and profiting handsomely from ‘advising’ the public to sell their shares back to them below even their current market valuation.
It’s a fair bet, too, that these private institutions want the majority of shares to remain in public hands until RBS has settled its debts in the US, where potential fines for its ‘sub-prime’ mortgage activities are rumoured to reach $13 billion.
And it’s a fair bet that Conservative Chancellor of the Exchequer George Osbourne will be delighted to use RBS to promote his personal political project of gaining more from privatization than Margaret Thatcher herself – and then succeeding David Cameron as Prime Minister.
What really takes the biscuit, however, is that all this is being done with the bald assertion, backed by no evidence or reasoned argument at all, that the very institutions that brought us the Great Recession – and owe the world some $260 trillion as a result – are somehow better qualified than anyone else to run banks.
Had they not been bailed out by the public, had they paid their debts instead, they would have evaporated long ago into the thin air from which they emerged.
A reasonable expectation must surely now be that the empty ideology prolonging their life will itself evaporate sooner rather than later – preferably before history repeats itself, again.
David Ransom is a former New Internationalist Editor. Most recently David edited the May 2015 issue on Global banking.