Banking: Quantitative Easing

Lord Myners Excerpts

Monday 10th October 2011 Lords Chamber

[Lord Sassoon]

I very much agree with my noble friend that the immediate priority is not so much consideration of the sale of the banks—UKFI will continue to monitor that closely—but to keep credit flowing. In relation to that, the Merlin agreement is critical. We treat the management of RBS and Lloyds on an arm’s-length basis, but we will ensure, as we have, that we have an agreement with all the major banks to increase lending on what it was last year and what it otherwise would have been. The third quarterly numbers will be released under the Merlin agreement shortly.

[Lord Myners]

My Lords, given that the Governor of the Bank of England has said that we are in the worst financial crisis since the 1930s and, conceivably, ever, how can it possibly be sensible for the Government to be actively seeking to sell the taxpayers’ interest in Northern Rock to City financial institutions?

[Lord Sassoon]

My Lords, we have a portfolio of banks which the Government either wholly or partly own. The Question was about Lloyds and RBS, but we also, as the noble Lord well knows, own Northern Rock and Bradford and Bingley. It is within the mandate of UKFI, which was set down by the previous Government, of whom the noble Lord was a member, to have responsibility to seek over time to realise value from the banks. That is precisely what it is exploring in the context of Northern Rock. It is following the noble Lord’s policy.