Lloyds stake sale: Two cheers for the Treasury

Lloyds branch

You might think - looking at the soar away Royal Mail share price or the escalation in costs of so many IT projects - that the government never gets value for money from privatisations or from investments.

But its spending watchdog, the National Audit Office, thinks it did a good job with the recent £3.2bn sale of an initial stake in Lloyds Bank.

You might think that's odd, in that the NAO says there was a loss on the deal of £230m

But that's all due to the interest costs for the Treasury of borrowing money to pay for the stake.

Those costs are real. But many regard it as a near miracle, given the mess that Lloyds got itself into, that the Treasury secured proceeds that exceeded by a tiny amount the cash price it paid when semi-nationalising the bank in 2008.

There is a sting in the praise, which is that the NAO says the success was partly due to the speed of the privatisation - due, in turn, to the fact that no shares were offered to the general public, with all of them going to investment institutions.

And since the Chancellor wants the next phase of the privatisation - probably in the spring - to include billions of pounds of shares being sold to millions of people, it may be harder for the Treasury to get such a good price next time.

Robert Peston, economics editor Article written by Robert Peston Robert Peston Economics editor

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  • rate this

    Comment number 221.

    When all around panicking at losses made about,
    When the hundreds of the millions are gone without a doubt
    When straight faced, you can announce this is a great success
    Your mental agility shows you are the best
    You are the man to run a Bank or National Audit Office
    You aren’t confused by silly terms like ‘gain turned into loss’
    And your bonus will keep growing because you are the boss.

  • rate this

    Comment number 220.

    Not at all related, but I'd like to know :
    Whatever happened to Pekin ?
    And where did Beijing come from ?
    Same with Bombay ... Whoever removed it from the map ?

  • rate this

    Comment number 219.

    Farage will sort the job out....only a matter of time before right thinking individuals call time on all this countries nonsense.

  • rate this

    Comment number 218.

    Let's hear it for the Treasury and this wonderful Coalition Government.
    Unemployment down.
    Inflation down.
    Record number attending University.
    IDS only "sort of" lied to the Commons about Welfare Figures.
    And the clocks are just striking thirteen.

  • rate this

    Comment number 217.

    214.The Bloke
    The UK isn't doing too badly compared to many of our fellow EU-countries, and the Tories are less bad than Labour.
    That's akin to saying Stalin was better than Moa because he a killed a few less!

    The debt has risen, growth figures are utter nonsense, factor in the "real" inflation figures the UK economy is still in negative.

    You haven't seen anywhere near the worst yet!


Comments 5 of 221



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