This looks like Labour’s plan for a national investment bank, writ smaller.
A Labour government would halt privatisation because it would not profit the state. This makes perfect sense – far more than the current Tory plan to sell to the rich at a loss for the poor.
But the offer is only to delay continued privatisation of RBS – and only if the bank commits itself to lending money to the regions, and to small businesses.
For This Writer, it is not enough. RBS played a large part in the financial crisis of 2008 and it would be fitting if that bank were kept in public ownership and made to put right the damage it caused.
Put the Tories in Labour’s place, with a similar kind of offer, and I’d be calling them liars. History shows that Conservatives will say what they think others want to hear, to get them on-side. Then they renege on the deal.
I wouldn’t mind at all if Labour reneged on this one and turned RBS into a part of – or the basis of – the National Investment Bank in the party’s manifesto.
But Labour is not the Conservative Party and I have a feeling this is a sincere offer. But will the RBS bankers – and their shareholders – share my belief?
[The] Labour party would halt the privatisation of Royal Bank of Scotland (RBS) if it came to power but would not seek to exert day-to-day control, the opposition party’s shadow banking minister told Reuters.
RBS shareholders voted on Wednesday to approve the bank’s plans to begin buying back its shares from the government in order to accelerate a return to majority private ownership, with more than 98 percent backing the proposal.
RBS remains 62 percent owned by British taxpayers after a £45 billion bailout in the 2008 financial crisis, although the Conservative government has conducted two share sales as it looks to return it to private ownership.
The government’s two RBS equity sales so far have crystallised deep losses for British taxpayers on shares that have almost halved in value since the bank’s rescue.
“If RBS is now paying dividends, and the price of the shares is under what was paid, we cannot see the rationale for selling more shares,” said Labour’s Jonathan Reynolds.
Having previously suggested full nationalization of RBS, Labour has been rowing back as it seeks to build bridges to the City of London and ease concerns about a Labour-led Britain.
The extent of state involvement would depend on RBS’ willingness to increase lending to Britain’s regions and small businesses.
“We don’t have a policy of day-to-day control of RBS,” he said. “But there is clearly unmet demand in lending and a problem with financial inclusion.”
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