‘Corbyn would return sold-off RBS to public with ‘no compensation’

The frontrunner in the Labour leadership election has stated that he could force public assets such as Royal Bank of Scotland that have been sold-off by the current UK Conservative government to be renationalised with “no compensation”, should he become prime minister.

According to Mr Corbyn’s campaign, Edinburgh-based RBS, which the UK taxpayer bailed out at the height of the financial crisis in 2008 at a cost of £45 billion, is among the resources that the MP for Islington North would “reserve the right” to take back into public hands if it is sold off too cheaply.

The returning of RBS to the public sector began at the start of this month with the sale of 5.4 per cent of the government’s near 80 per cent stake at 330p a share.

The move raised £2.1 billion, a third below the price that politicians paid when the shares were valued at 500p at the time of the bailout, resulting in a loss for the taxpayer of £1 billion.

The move caused controversy among politicians and some financial commentators and according to reports regarding Mr Corbyn’s intentions, a renationalisation could happen “with either no compensation or with any undervaluation deducted from any compensation for renationalisation”.

The news comes as the economic advisor to Mr Corbyn said leadership hopeful would also end the independence of the Bank of England and sack its Governor if he refused to print money to fund public projects.

Richard Murphy, the architect of “Corbynomics”, has branded the independence of the Bank of England as “a fiasco” and claimed it does not really exist.

He said that if Mark Carney, the Canadian who is the Bank’s current Governor, refused to agree to “people’s quantitative easing”, the term for printing money for public projects, then he would be “on the next plane out of the country.”

He said: “There is no such thing as Bank of England independence, there never has been; it’s a fiasco put together, a facade created to appease people to put forward a presentation of something that doesn’t exist.”

At the weekend 40 economists wrote a letter to the Observer backing Mr Corbyn’s plans for the economy.

In the letter, signatories including former Bank of England adviser Danny Blanchflower dismiss claims Corbyn’s economic policy is “extreme”, claiming instead that his opposition to austerity is “actually mainstream economics”.

The accusation is widely made that Jeremy Corbyn and his supporters have moved to the extreme left on economic policy. But this is not supported by the candidate’s statements or policies.

His opposition to austerity is actually mainstream economics, even backed by the conservative IMF. He aims to boost growth and prosperity.

Meanwhile, the UK Treasury has disposed of another £500 million of its Lloyds Banking Group holding, increasing the total raised to £14.5bn.

Earlier this month the Government confirmed that it had sold £14bn of shares in the Edinburgh-based group.

The latest sale represented a further 1 per cent of the holding.

The Government now holds less than 13 per cent of Lloyd’s total stock.