Vince Cable: chancellor ‘irresponsible’ for selling off RBS

Vince Cable has accused the chancellor of being “irresponsible” over his decision to sell off two-thirds of its remaining stake in bailed-out lender RBS at a significant loss.

The budget red book assumes that £3bn a year will be raised over the next five years from the sale of RBS shares, helping to offset the extension in the Help to Buy scheme announced at September’s party conference.

But the current RBS share price is 270p, well below the 502p at which the government would recover the money spent on rescuing the ailing lender.

The Liberal Democrat leader said pressing ahead with a sale, without waiting for the share price to recover further, would be “a very irresponsible thing to do”.

“Even when [George] Osborne was privatising it, there was an agreement about what an acceptable price would be – there was no doubt about that.”

Treasury sources suggested the bank had almost completed the recovery programme undertaken in the wake of the financial crisis, and had settled a US Department of Justice case that had cast a shadow over its prospects.

Labour’s City minister, Jonathan Reynolds, said: “After years of mismanaging RBS, the Tories are now trying to patch up their budget by selling off the shares at a loss to the taxpayer.”

The Labour manifesto suggested breaking up RBS to create a series of local banks.