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”
Anthony Cavanagh
Not even the 46 billion RBS has lost. The amount the tax payer pumped in.
robertcp
My understanding is that the Government borrowed £46 and will get some of that back when it sells its stake.
blarg1987
it also depends on the time frame of the model used.
Holding onto loss making assets for a few years will do as you say. Holding onto them for a few decades, which government can afford to do, is a different kettle of fish.
Chrisso
This is a non-story. The Independent and Guardian reported it too, albeit with less triumphalism. But the facts remain. The Labour govt bailout saved the banks AND brought about a profit to the taxpayer. That should be shouted out by the LFF.
Cole
Osborne just did it for ideological reasons (along with privatising large chunks of the NHS). And of course the coalition flogged off the Post Office at a ludicrously low price. Who knows if they were conned or were trying to enrich their mates?