Royal Bank of Scotland

Lord King of Bridgwater Excerpts

Tuesday 5th June 2018 Lords Chamber

[Lord Bates]

The noble Lord may say that we sold it too cheaply; I might say that he bought it too high, which is another way of looking at the £5.02. It is a fundamentally different bank to the one which was acquired then. The price which we sold at yesterday—271p—was near the top end of the present yearly average. We have signalled that we do not believe that a Government should be in the business of running these banks. The Chancellor announced in last year’s Autumn Budget that we would gradually dispose of our interest in the bank over the next five years, and that is what we are doing.

[Lord King of Bridgwater (Con)]

Does my noble friend agree that the situation as advanced by the Opposition Front Bench and Liberal Benches is a complete distortion? The loss occurred when the decision was made to buy all the shares to support the interests of all the depositors in the bank at that time. The implication of the Question is that, if we hang on to the shares, we can be guaranteed a higher price later on. This procedure is entirely sensible. We bring in some money while we can: as we know, there are a lot more shares to go. We can continue to consider at what stage we get rid of the shares and sell them at the best price we can. That was when the loss was made, not now.

[Lord Bates]

My noble friend is absolutely right. There is a sense here of forgetting the history of what the situation was in 2008 and the incredible damage that was done to our economy—which we are still having to clear up so many years later. That is the reality of the situation. When the National Audit Office looked into how we would do this, the first sale was done on an accelerated book-build process, and it recognised that it offered value for money in the circumstances. However, the fact is that we are in these circumstances as a result of the realities of what happened in 2008, and we should not forget that.