RBS

Lord Brabazon of Tara Excerpts

Thursday 11th June 2015 Lords Chamber

[Lord Ashton of Hyde]

My noble friend is exactly right. He talked about fines on banks. It is very important, as he mentioned, that the Governor of the Bank of England spoke in his Mansion House speech of increasing penalties from seven to 10 years so that individuals know that they cannot play with the balance sheets of their banks and get away with it, and the penalties as such rest on the shareholders. I completely agree with him. Personally—no, “personally” is irrelevant. The Government think that, despite the fact that we increased regulation, made it more efficient and increased criminal penalties, the most important thing is the culture and ethics of the bank. That is from the top of the bank downwards. If bankers and their boards and chief executives know that and are absolutely determined that ethics should prevail, we will be in a much better position than we were. That is the single most important thing.

[Lord Brabazon of Tara (Con)]

My Lords, I thought that somebody from the other side might get up, but evidently not. I welcome the Statement, as it goes, particularly in terms of selling the RBS shares. However, I hope my noble friend and the Government will not take too much criticism for selling them at a price below that which the Government paid. As an old stockbroker—admittedly, it is 30 years since I was one—one knows that a share is worth what it is worth at the moment, not what you paid for it. If you go on looking at what you paid for a share, your future will end in tears. The reason you hold the share is that you hope its value will go up and not down, and you wonder if you have anything better to do with the money instead. That is why you should possibly sell. I welcome that. As my noble friend Lord Higgins said, this is only the start of the sale process. It is not necessarily all to be sold at this price. If you were to wait until some time in the future when the share price might get up to what it was bought for, you could wait for ever and ever. Also, although my noble friend already said this, he does not want to take too much advice from the party opposite about this sort of thing, as we all remember the gold sales with billions and billions lost.

[Lord Ashton of Hyde]

My noble friend is correct. Of course the Government are prepared to take criticism if criticism is due, but in this case it is not. We must also remember that it was not this Government who paid the purchase price but a previous Government who had to deal with a crisis situation brought on by, among other things, the chaotic system of bank regulation. If this Government are prepared to deal with that in a way that can provide an overall profit to taxpayers, they should be—as I am sure they will be—duly given the praise they deserve from all parts of the House.