Osborne Plays Down Talk Of RBS Share Giveaway

By Katie Stallard, Moscow correspondent

George Osborne has played down claims he plans to give British taxpayers up to £400 in Royal Bank of Scotland shares before the next election.

The Chancellor, speaking to Sky News at a G20 meeting in Moscow, said it was too early to consider handing out shares and returning the bailed out bank to the private sector.

His intervention came after reports that Economic Secretary to the Treasury Sajid Javid was exploring plans to sell the Government's stake by 2015.

The Chancellor insisted a sell-off could not happen soon because it would mean a huge loss to the taxpayer, but he notably did not rule out such a move.

Mr Osborne said: "It is just a premature discussion about what to do with the shares when we get to the point where they are worth what the country paid for them.

"Gordon Brown bought them at a price that they are not worth today and we have got to get the Royal Bank of Scotland to a point where it is worth what the taxpayer paid.

"Then we can have a no doubt big national discussion about what to do with the shares and how to return it to the private sector."

RBS was bailed out with £45bn in public funds in 2008 at the height of the financial crisis and is now 81% owned by the state.

Royal Bank of Scotland is 81% state-owned after a £45bn bailout

In Moscow for the finance ministers' meeting, Mr Osborne also renewed his call for a global tax crackdown and issued a warning about international "currency wars".

There is increasing concern about competitive devaluations between major exporting economies as they struggle to recover from the global downturn.

Japan has been criticised for weakening the Yen, which is down 15% against the dollar since September, to give its exporters a price advantage in the short term.

"These so-called currency wars are what in previous decades have led to huge problems in the international economy," the Chancellor said.

"I think people will be pleasantly surprised by the strong statement that you'll see from the G20 today that currency is not a tool of economic warfare.

"What we want to do in our own countries is put our own houses in order and make our economies competitive and our currencies will reflect that rather than being used as a weapon to achieve it."

On tax, Mr Osborne said current rules are out of date and that Britain would lead efforts to stop companies shifting their profits around the globe to avoid large bills.

"The international rules on taxes haven't kept pace with changes in the world economy, changes in the way we shop online and use the internet so we're taking action with countries like France, Germany, and the United States," he said.

"Britain is leading the way in getting a set of rules that mean that businesses can come to Britain, and Britain is one of the best places to do business, but also when they come to Britain - they pay their taxes.

"It means that big international companies that may have their headquarters in one country, their shops in many other countries, may locate their so-called intellectual property in another country altogether, perhaps a low tax place like Bermuda or the Cayman Islands.

"They'll find that a more difficult arrangement because the international tax rules will change and they will have to pay taxes much more where the profits are generated - that's the objective."

But he acknowledged that Britain could not act alone and that they needed global consensus to make it happen.

Just getting agreement on the need for a crackdown from the 20 countries represented in Moscow on Saturday would represent significant progress in itself.

Mr Osborne said: "There is no single law Britain can pass that will make this happen.

"This has to be done internationally and so we are working with other countries to make sure it does happen and that the tax laws which were actually created about a 100 years ago are appropriate for an economy of the 21st century rather than the 20th century."

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