BRITISH chancellor George Osborne faced criticism yesterday after taxpayers were left making a £1 billion loss as the process to return Royal Bank of Scotland to private hands with a £2.1bn share sale.
But he insisted the move was the "right thing to do for the taxpayer", coming seven years after the government rescued RBS - parent company of Ulster Bank - with a £45.5bn bailout at the height of the financial crisis.
It marks a milestone moment for the banking sector as it puts the crisis behind it, while it also kick-starts the treasury's plans for a bigger privatisation programme than in the 1980s with aims to raise more than £30bn by the end of next March.
But concerns have been raised over the timing of the treasury's decision to sell-down its 78 per cent stake in RBS after the taxpayer has been left nursing a £1.08 billion loss.
UK Financial Investments (UKFI), the body that holds the government's RBS stake, said it offloaded 5.4 per cent of RBS at 330p a share overnight on Tuesday- far short of the average 502p price paid at the time of the bailout.
Labour questioned the government's "rush to begin the sell-off" of RBS shares.
Shadow chancellor Chris Leslie said: "Taxpayers who bailed out RBS and who have now lost out will want to know why the Government has sold these shares at a discount and while the bank is still awaiting a US settlement for the mis-selling of subprime mortgages.
"Getting back the taxpayers' money is not an impossible objective and the Chancellor is dismissing this too lightly."
Mr Osborne defended the move, saying RBS needed to be returned to the private sector for the benefit of the economy and to help the bank rebuild itself.
The move has reduced the government's stake in the group from 78.3 per cent to around 72.9 per cent and the £2.1bn raised will be used to pay down the UK's national debt.
