George Osborne used a government-commissioned report by the investment bank Rothschild to claim that the taxpayer was £14.3 billion in profit from the massive bailouts of 2008 and 2009.
The taxpayer injected £107.6 billion into saving Lloyds, RBS and a string of smaller banks, such as Bradford and Bingley. According to Rothschild, following the sales of stakes in these institutions and once fees were taken into account, there was a profit of £14.3 billion. However, Andrew Tyrie, who is set to be re-elected as chairman of the Treasury select committee, suggested yesterday that the figure was an incomplete assessment of the financial contribution of taxpayers.
Mr Tyrie said: “The Rothschild review puts the net gain to the taxpayer from the bank bailouts at £14 billion. This would benefit from a great deal of qualification. It excludes the cost of funding the bailouts. The OBR [Office for Budget Responsibility] put this at £17 billion. And it treats fees paid in exchange for a service as if they were income, or recoveries.”
The Treasury defended the way the chancellor presented the figures. A spokesman said: “The methodology used by Rothschild is the same as that used by the independent Office for Budget Responsibility in their analysis of the government’s interventions in the banking sector and by the US Treasury. The Rothschild report clearly sets out that taxpayers can expect to get back £14 billion more than they put into the banks.”
Labour accused the Treasury of “dodgy” accounting. Chris Leslie, the shadow chancellor, said: “Taxpayers who bailed out RBS want their money back in full and will rightly be suspicious of any rush to sell. When RBS is still restructuring the business, and awaiting a US settlement for the mis-selling of subprime mortgages, a premature sale poses a risk for taxpayers.”