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National Audit Office asked to review government sale of RBS shares

Paloma Kubiak
Written By:
Paloma Kubiak

The chairman of the Treasury Select Committee has written to the National Audit Office asking it to review the advice provided to the government over the sale of RBS shares last year, which saw a £1bn loss.

MP Andrew Tyrie, has today written to Amyas Morse, the auditor of the National Audit Office, (NAO) asking him to review the advice provided by UK Financial Investments to the government, ahead of its first sale of holdings in RBS in August.

Tyrie said that both the public and parliament want reassurance that the decision to sell provided the “best value for money for the taxpayer”.

It follows criticism of the Chancellor over the sale of the government-owned shares in RBS at a 52-week low, incurring a £1.1bn loss to taxpayers on the price originally paid.

George Osborne’s decision on when and how to sell the shares was based on advice from the UKFI which was created with the intention to ensure that state and partly state-owned banks are run free from government interference.

In the letter, Tyrie tasks Morse and the NAO to examine the quality of UKFI’s advice and the extent to which the government adhered to it, stating it would be helpful if it could be done “sooner rather than later”.

He wrote: “UKFI’s overarching objective is to ‘devise and execute a strategy for realising value for the government’s investments in an orderly and active way over time within the context of protecting and creating value for the taxpayer as shareholder’. Taxpayers, who remain on the hook for bailing out the banks through the purchase of these shares, need assurance that advice to sell the stock was correct.

“The Committee, on behalf of Parliament, expects the NAO will want similarly to examine this first sale of shares in RBS. In particular, an analysis of the advice provided over this extended period [summer of 2014 – sale in August 2015] would help the Committee to scrutinise, in greater detail, whether an attempt to subject UKFI to undue influence was made in the lead up to this first sale of shares in RBS.”