RBS

Baroness Wheatcroft Excerpts

Thursday 11th June 2015 Lords Chamber

[Lord Ashton of Hyde]

First, if the Government thought that the price was to reduce in future, they would sell the whole lot now—and they are not. As the noble Lord mentioned, the Governor of the Bank of England said that the return would promote financial stability and a more competitive banking sector. He also said—this has not been mentioned—that avoiding the sale would have the potential to incur considerable net costs to the taxpayer, further delaying the start of a sale.

Rothschild’s advice also said that by starting the sale now,

“the government will increase the free float which should in turn improve the marketability of the remainder of its shareholding”.

It will also send,

“a strong signal that RBS is on the road to recovery and that its reprivatisation has begun may also bring further benefits to the bank and therefore to the taxpayer as a shareholder”.

Currently, the:

“Market conditions for financial assets and bank shares are … good”.

The overall accumulation of that advice is that, in the absence of unforeseen circumstances, taxpayers can comfortably expect to secure proceeds from their interventions in the banks that exceed the money they put in.

[Baroness Wheatcroft (Con)]

My Lords, there was a stage when Governments owned travel agencies and steelworks, not very profitably. It is not right for Governments to own those businesses and it is not appropriate for Governments to own banks. I am delighted to hear that the Government are making a start—probably only a small one—in exiting RBS. No doubt, the bank will thrive more in the private sector. Would my noble friend agree with me that at some stage it would be desirable for the customers of the Royal Bank of Scotland to be offered shares in the bank?

[Lord Ashton of Hyde]

They have been offered an ability to participate in the purchase. The Chancellor said that although the first tranche will be done on an institutional basis because of the complex investment case, there is no reason why customers and taxpayers, importantly, should not be able to participate in the sales at a later date, and I very much hope that that will happen.