The Tories could do anything to the economy and the press would eat it up
The Sun has carefully maintained a pro-Conservative party sheen in reporting the government’s sell-off of its stake in the Royal Bank of Scotland (RBS).
The sale will leave the public, who bailed out the bank to the tune of £45 billion after the financial crash, with a £7 billion loss.
But chancellor George Osborne’s magical ability to conjure money from the air has provided the Sun with its news angle:
“£14BN SELL OFF BONANZA
Taxpayers will make a surprise £14 billion profit from the financial cirsis, George Osborne has revealed – as he unveiled a risky early sell of of RBS.
[…] a Rothschild report has revealed all the re-privatisations [of banks] will end up bringing a net £14 billion gain.”
The Telegraph’s coverage of the same story tells us more about this £14 billion:
“This RBS loss, however, will be more than offset by profits made on the ongoing return of Lloyds bank to full private ownership, as well as other government interventions, such as the sale of Northern Rock mortgage portfolios and the fees on liquidity support for numerous banks at the height of the crisis in 2008.”
In other words, the £14 billion has nothing whatever to do with RBS. The government has sold the bank at a loss, but made money from the sale of other banks.
This doesn’t ‘offset’ the loss – imagine if RBS had been sold for more money. Then net profit would be more than £14 billion.
The Sun’s report, nearly matched in other papers, chooses to lead with the irrelevant £14 billion and mention the RBS sell-off loss as a sideshow.
Yet again the paper acts as a propaganda sheet for the government, of the kind it rails against in its editorials.
Adam Barnett is a staff writer at Left Foot Forward. Follow MediaWatch on Twitter
Read more:
Sun mocks ‘Red Andy’ on petrol price. But Cameron didn’t know the price of bread
Daily Mail’s Femail mag warns of a ‘march of feminist bullies’
Sign up for our weekly email by clicking here.
To reach hundreds of thousands of new readers and to make the biggest impact we can in the next general election, we need to grow our donor base substantially.
That's why in 2024, we are seeking to generate 150 additional regular donors to support Left Foot Forward's work.
We still need another 124 people to donate to hit the target. You can help. Donate today.
20 Responses to “The Sun spins Osborne’s £7bn loss into £14bn ‘profit’ in RBS sale coverage”
Torybushhug
I recently sold my RBS shares, the future for large banks doesn’t look very promising, best to cut my losses now just as Govt has concluded.
Investors take a calculated loss all the time and focus their energies and resources in more fruitful endeavour.
It’s the ignorant populist line to claim this all amounts to a needless profligate loss.
Jacko
Only someone who knows nothing about markets -that’s you Adam Barnett- would write something as naive and juvenile as this. It’s simply laughable.
This is what you’ve said:
“If a person sells every item in his portfolio at a profit, he will make more more money than if he sold some at at loss. For that reason he shouldn’t sell anything at a loss.”
Actually Adam, this is not correct. Holding onto losers often results in the paper loss simply increasing and reducing the overall profit. One can maximize the overall portfolio profit by selling losers early. Secondly, portfolios can consist of mainly losers but still make money overall, due to the way they have been balanced and the magnitude of gains compared to magnitude of losses. It’s the fundamental basis of portfolio management. One uses the money from the sale of losers to re-invest in a new portfolio and make more money.
So the Telegraph is absolutely correct in it’s statement.
And you wonder why no-one trusts the Left on the economy.
Keith M
Is there any way of getting a prosecution – this is our money he!s stealing.
Anthony Cavanagh
What about the Sun story is that correct about RBS sell of making a profit, that is how the sun readers will read it. That is how i scanned it.
Anthony Cavanagh
Actually RBS lost all the money we invested into the bank, it was what £46 billion. Chump change i know.