How Osborne backed down on an RBS firesale

Having previously briefed that Osborne was planning a pre-election give-away of shares, the Tories changed tack after Balls's intervention.

It's now thought unlikely that George Osborne will use his Mansion House speech tonight to announce plans for a quick-fire sell-off of RBS, but that's not what the Tories were briefing a few months ago.

As recently as February, it was reported that Osborne had ordered Treasury officials to plan for a pre-election give-away of shares in the bank, with a source telling the Independent: "One of the options could be to put it in our manifesto – but then Labour could do that as well. Wouldn't it be much better if voters were getting a check for £400 a few months before election day?" Another Treasury figure suggested that selling the shares at a loss would be better than the "political headaches" associated with retaining them. A few days later, David Cameron confirmed that the government was examining the "interesting" idea of distributing shares to taxpayers and was reported to have ordered RBS executives to "accelerate" preparations for a pre-2015 sell-off. 

Then, in May, a minister close to Osborne suggested that it was "unrealistic" to expect the RBS share price to return to its 2008 level in the near future and that the government may have to sell the shares while they were "under water". Later that month, speaking to reporters in New York, Cameron refused to rule out selling the shares at a loss and said he was open "to all ideas and proposals".

It was soon after this, on 27 May, that Ed Balls intervened, warning in an interview with the Times that a loss-making firesale would "add billions to the national debt" and urging Osborne not to put "politics before economics". Osborne was later reported to be planning to use his Mansion House speech  to set out his strategy for an RBS sell-off, with the Treasury examining proposals from Policy Exchange on a share give-away.

But by mid-June, the government had started to rapidly shift its position. The Treasury insisted that it had no fixed timetable or share price in mind and Cameron remarked that taxpayers were "more interested than getting their money back" than the timing of a return to the private sector. Having previously talked up the possibility of Osborne unveiling plans for an RBS sell-off in his Mansion House speech, the Treasury now suggested that the speech would focus on the sale of Lloyds' shares and would not set out a firm timetable for privatisation for either bank. Then, on 18 June, Osborne himself told the Today programme that he wanted to make sure that "the taxpayer gets value for money" and that the return of RBS to the private sector was "a matter for the market". Having previously expressed a bias in favour of an early sell-off, the Chancellor had backed down, heeding the warnings of Balls and others that a firesale was not in the public interest. 

Score this one for the shadow chancellor. 

George Osborne leaves 11 Downing Street earlier today. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: André Spicer
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“It’s scary to do it again”: the five-year-old fined £150 for running a lemonade stand

Enforcement officers penalised a child selling home-made lemonade in the street. Her father tells the full story. 

It was a lively Saturday afternoon in east London’s Mile End. Groups of people streamed through residential streets on their way to a music festival in the local park; booming bass could be heard from the surrounding houses.

One five-year-old girl who lived in the area had an idea. She had been to her school’s summer fête recently and looked longingly at the stalls. She loved the idea of setting up her own stall, and today was a good day for it.

“She eventually came round to the idea of selling lemonade,” her father André Spicer tells me. So he and his daughter went to their local shop to buy some lemons. They mixed a few jugs of lemonade, the girl made a fetching A4 sign with some lemons drawn on it – 50p for a small cup, £1 for a large – and they carried a table from home to the end of their road. 

“People suddenly started coming up and buying stuff, pretty quickly, and they were very happy,” Spicer recalls. “People looked overjoyed at this cute little girl on the side of the road – community feel and all that sort of stuff.”

But the heart-warming scene was soon interrupted. After about half an hour of what Spicer describes as “brisk” trade – his daughter’s recipe secret was some mint and a little bit of cucumber, for a “bit of a British touch” – four enforcement officers came striding up to the stand.

Three were in uniform, and one was in plain clothes. One uniformed officer turned the camera on his vest on, and began reciting a legal script at the weeping five-year-old.

“You’re trading without a licence, pursuant to x, y, z act and blah dah dah dah, really going through a script,” Spicer tells me, saying they showed no compassion for his daughter. “This is my job, I’m doing it and that’s it, basically.”

The girl burst into tears the moment they arrived.

“Officials have some degree of intimidation. I’m a grown adult, so I wasn’t super intimidated, but I was a bit shocked,” says Spicer. “But my daughter was intimidated. She started crying straight away.”

As they continued to recite their legalese, her father picked her up to try to comfort her – but that didn’t stop the officers giving her stall a £150 fine and handing them a penalty notice. “TRADING WITHOUT LICENCE,” it screamed.


Picture: André Spicer

“She was crying and repeating, ‘I’ve done a bad thing’,” says Spicer. “As we walked home, I had to try and convince her that it wasn’t her, it wasn’t her fault. It wasn’t her who had done something bad.”

She cried all the way home, and it wasn’t until she watched her favourite film, Brave, that she calmed down. It was then that Spicer suggested next time they would “do it all correctly”, get a permit, and set up another stand.

“No, I don’t want to, it’s a bit scary to do it again,” she replied. Her father hopes that “she’ll be able to get over it”, and that her enterprising spirit will return.

The Council has since apologised and cancelled the fine, and called on its officials to “show common sense and to use their powers sensibly”.

But Spicer felt “there’s a bigger principle here”, and wrote a piece for the Telegraph arguing that children in modern Britain are too restricted.

He would “absolutely” encourage his daughter to set up another stall, and “I’d encourage other people to go and do it as well. It’s a great way to spend a bit of time with the kids in the holidays, and they might learn something.”

A fitting reminder of the great life lesson: when life gives you a fixed penalty notice, make lemonade.

Anoosh Chakelian is senior writer at the New Statesman.