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.

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Pity the Premier League – so much money can get you into all sorts of bother

You’ve got to feel sorry for our top teams. It's hard work, maintaining their brand.

I had lunch with an old girlfriend last week. Not old, exactly, just a young woman of 58, and not a girlfriend as such – though I have loads of female friends; just someone I knew as a girl on our estate in Cumbria when she was growing up and I was friendly with her family.

She was one of many kind, caring people from my past who wrote to me after my wife died in February, inviting me to lunch, cheer up the poor old soul. Which I’ve not been. So frightfully busy.

I never got round to lunch till last week.

She succeeded in her own career, became pretty well known, but not as well off financially as her husband, who is some sort of City whizz.

I visited her large house in the best part of Mayfair, and, over lunch, heard about their big estate in the West Country and their pile in Majorca, finding it hard to take my mind back to the weedy, runny-nosed little girl I knew when she was ten.

Their three homes employ 25 staff in total. Which means there are often some sort of staff problems.

How awful, I do feel sorry for you, must be terrible. It’s not easy having money, I said, managing somehow to keep back the fake tears.

Afterwards, I thought about our richest football teams – Man City, Man United and Chelsea. It’s not easy being rich like them, either.

In football, there are three reasons you have to spend the money. First of all, because you can. You have untold wealth, so you gobble up possessions regardless of the cost, and regardless of the fact that, as at Man United, you already have six other superstars playing in roughly the same position. You pay over the odds, as with Pogba, who is the most expensive player in the world, even though any halfwit knows that Messi and Ronaldo are infinitely more valuable. It leads to endless stresses and strains and poor old Wayne sitting on the bench.

Obviously, you are hoping to make the team better, and at the same time have the luxury of a whole top-class team sitting waiting on the bench, who would be desired by every other club in Europe. But the second reason you spend so wildly is the desire to stop your rivals buying the same players. It’s a spoiler tactic.

Third, there’s a very modern and stressful element to being rich in football, and that’s the need to feed the brand. Real Madrid began it ten years or so ago with their annual purchase of a galáctico. You have to refresh the team with a star name regularly, whatever the cost, if you want to keep the fans happy and sell even more shirts round the world each year.

You also need to attract PROUD SUPPLIERS OF LAV PAPER TO MAN CITY or OFFICIAL PROVIDER OF BABY BOTTLES TO MAN UNITED or PARTNERS WITH CHELSEA IN SUGARY DRINK. These suppliers pay a fortune to have their product associated with a famous Premier League club – and the club knows that, to keep up the interest, they must have yet another exciting £100m star lined up for each new season.

So, you can see what strains and stresses having mega money gets them into, trying to balance all these needs and desires. The manager will get the blame in the end when things start to go badly on the pitch, despite having had to accommodate some players he probably never craved. If you’re rich in football, or in most other walks in life, you have to show it, have all the required possessions, otherwise what’s the point of being rich?

One reason why Leicester did so well last season was that they had no money. This forced them to bond and work hard, make do with cheapo players, none of them rubbish, but none the sort of galáctico a super-Prem club would bother with.

Leicester won’t repeat that trick this year. It was a one-off. On the whole, the £100m player is better than the £10m player. The rich clubs will always come good. But having an enormous staff, at any level, is all such a worry for the rich. You have to feel sorry . . .

Hunter Davies’s “The Beatles Book” is published by Ebury

Hunter Davies is a journalist, broadcaster and profilic author perhaps best known for writing about the Beatles. He is an ardent Tottenham fan and writes a regular column on football for the New Statesman.

This article first appeared in the 29 September 2016 issue of the New Statesman, May’s new Tories