Socialised Losses, Privatised Profits: The Great NatWest Heist

Socialised Losses, Privatised Profits: How Rachel from Accounts Gifted Billions to Banking Parasites

The Neoliberal Playbook: How NatWest’s Windfall Proves the System Is Rigged…

What does it tell us about the moral bankruptcy of British capitalism when a bank rescued from collapse by public money immediately rewards private shareholders with those same public funds? The answer arrived this week with NatWest’s announcement of a £1.5bn windfall for investors, a grotesque celebration occurring mere weeks after the government sold its final stake in the institution that public money saved from extinction during the 2008 financial crisis.

The mathematics of this grand larceny are as simple as they are obscene. The British public provided £45bn to prevent NatWest’s collapse when the banking system’s reckless gambling brought it to the brink of destruction. Sixteen years later, after absorbing a £10bn loss on the bailout, those same people watch helplessly as the bank they saved showers shareholders with dividends and buybacks worth £1.5bn in a single quarter.

This represents the purest distillation of neoliberal economics in action. Socialise the losses when private greed produces inevitable catastrophe, then privatise the profits when public intervention restores viability. The British people funded NatWest’s survival but receive none of its prosperity, transforming democratic governance into a wealth transfer mechanism from ordinary British people to financial elites.

Chancellor Rachel Reeves, who claims a background as an economist, makes her complicity all the more inexcusable, not only enabled this robbery but actively facilitating it. Her decision to complete NatWest’s privatisation at precisely the moment when the bank’s restored health promised substantial returns represents either breathtaking incompetence or deliberate class collaboration. Given her Treasury’s simultaneous claims about fiscal constraints preventing investment in public services, the latter explanation seems more plausible.

The timing proves particularly offensive. As Reeves lectures the country about painful choices and fiscal responsibility, as she prepares to squeeze public spending while maintaining corporate tax breaks, she has gifted billions to investors who contributed nothing to NatWest’s salvation. The same government that claims inability to fund adequate healthcare, education, or social care somehow discovers unlimited generosity when banking profits await distribution.

NatWest CEO Paul Thwaite’s warning about potential bank taxes adds insult to injury. Having benefited from the largest corporate welfare programme in British history, he now threatens that further contributions to public finances might “spook investors” and “harm growth efforts.” The audacity is staggering: a bank that owes its existence to public intervention now claims that public contributions represent dangerous interference with market operations.

This shameless ingratitude illuminates the systematic corruption of British economic policy. The banking sector that required unprecedented public rescue has spent subsequent years lobbying against the regulations and taxes that might prevent future catastrophes. Instead of grateful acknowledgment of public salvation, we witness entitled demands for ever-greater freedom to repeat the behaviours that necessitated bailouts.

NatWest’s shareholder bonanza represents merely the latest iteration of a familiar formula. Rail companies extract profits while delivering declining services, then demand public subsidies when revenues fall short. Energy corporations socialise infrastructure costs through bill-payer contributions, then privatise the resulting profits. Water companies burden consumers with debt-funded dividends, then expect public rescue when their business models collapse.

The £10bn loss suffered by the public during the privatisation process cannot be dismissed as inevitable market friction. This represents a deliberate political choice to prioritise investor enrichment over public return. Alternative approaches, from maintaining majority public ownership to implementing windfall profit taxes, could have ensured that the British people benefited from their investment’s success rather than merely absorbing its initial costs.

The counterfactual scenarios that Reeves deliberately rejected. Maintaining public ownership would have generated substantial dividend income for the Treasury, funding public services rather than private yacht purchases. Alternatively, imposing clawback provisions could have ensured that extraordinary profits triggered proportional public returns, recognising the public’s continuing stake in the bank’s success.

The international comparisons prove particularly damning. Germany’s approach to banking intervention maintained substantial public stakes that continue generating returns. France’s partial nationalisations preserved democratic influence over strategic decisions while ensuring public benefit from restored profitability. Even the United States secured warrants and preferred shares that provided public returns from banking bailouts.

Britain alone chose the approach that maximised private benefit while minimising public return. This decision reflects not economic necessity but ideological commitment to transferring wealth from ordinary people to financial elites, regardless of the circumstances that created such opportunities.

When governments systematically prioritise investor returns over public welfare, they signal that democratic institutions exist primarily to serve capital rather than the people. The message is unmistakable: privatisation represents a one-way transfer of public assets to private interests, with no expectation of reciprocal obligation or social responsibility.

NatWest’s celebration of privatisation while distributing publicly-funded profits epitomises this perverted logic. The bank’s survival depended entirely on public intervention, yet its prosperity benefits exclusively private interests. This arrangement would be recognised as theft if applied to individual property, but becomes respectable economic policy when applied to collective assets.

The path forward requires fundamental reconsideration of the relationship between public intervention and private profit. When the public rescues failing corporations, it acquires legitimate claims to future prosperity that cannot be simply erased through privatisation processes. These claims should be recognised through permanent public stakes, profit-sharing arrangements, or windfall taxation that ensures collective benefit from collective investment.

The NatWest privatisation represents a missed opportunity to create genuinely public banking that could fund infrastructure investment, support community development, and provide ethical alternatives to predatory financial practices. Instead, we have gifted a publicly-created institution to interests that will use it primarily for wealth extraction rather than economic development.

Rachel Reeves’ role in facilitating this transfer reveals the complete capture of Labour economics by neoliberal orthodoxy. The party that once represented working-class interests now serves as an efficient delivery mechanism for policies that benefit capital at labour’s expense. Her Treasury’s simultaneous claims about fiscal constraints while enabling billion-pound shareholder distributions expose the fraudulent nature of austerity economics. If we didn’t know better, you could swear she’s still trying to please her old bosses…

The ultimate question is whether British democracy can survive this systematic conversion of public resources into private wealth. When governments consistently prioritise investor enrichment over people’s welfare, when public intervention serves primarily to socialise risks while privatising rewards, the social contract underlying democratic governance faces existential threat.

NatWest’s shareholders’ celebration represents more than financial success; it constitutes a victory parade for the forces that have hollowed out public institutions while enriching private interests. Their £1.5bn windfall was funded by the same public that now faces service cuts, benefit freezes, and infrastructure decay justified by claims of fiscal impossibility.

The bitter irony is that this same public will likely fund future banking bailouts when the next crisis arrives, as it inevitably will. The privatisation of profit combined with socialisation of loss creates moral hazard that guarantees repeated financial catastrophes, each requiring fresh public intervention to save private institutions from their own recklessness.

Until we break this cycle by maintaining public ownership of rescued institutions, by implementing windfall taxes that capture extraordinary profits, and by recognising the public’s permanent stake in publicly-supported enterprises, we will continue witnessing the transformation of democratic governance into organised theft. The NatWest privatisation represents not economic progress but democratic regression, the conversion of collective assets into private playthings for an increasingly parasitic financial elite.

This is the final act in a global tragedy where banks first stole billions from people around the world, breaking families, destroying lives, seizing homes, obliterating businesses, and eliminating jobs, then demanded public rescue when their criminal recklessness inevitably collapsed. Now, having been saved by the very people they robbed, they celebrate by distributing the spoils to shareholders while the public that rescued them suffers austerity and decay.

The British people deserve better than serving as unwilling funders of shareholder enrichment. They deserve economic institutions that recognise their responsibilities to public contributions, respect their interests, and serve their needs rather than merely extracting their wealth. But with Rachel from accounts at the helm, steering us deeper into this corrupt arrangement while wearing the badge of progressive politics, such transformative change remains as elusive as banker accountability itself.