Asked by: Richard Burgon (Labour - Leeds East)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, what advice UKFI provided to his Department on when and how to complete a sale of Royal Bank of Scotland shares.
Answered by Harriett Baldwin
The Government has been consistently clear that its policy in respect of Royal Bank of Scotland (RBS) is to return the bank to the private sector in full. The advice received from Rothschilds and the Governor of the Bank of England relates specifically to the appropriate timing of an initial share sale.
UK Financial Investments (UKFI) is responsible for the execution of share sales, and advised the Chancellor in August 2015 that it would be appropriate to conduct the first sale of the Government’s shareholding in RBS. On 3 August 2015, UKFI sold approximately 5.4% of the bank via an accelerated bookbuilding process.
Asked by: Richard Burgon (Labour - Leeds East)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, pursuant to his Written Statement of 2 June 2015, HCWS10, on the trading plan for government shares in Lloyds Banking Group, whether he set a target for the (a) number of shares to be sold and (b) price per share for Lloyds Banking Group at the time of that Statement.
Answered by Harriett Baldwin
In December 2014 the Chancellor launched a trading plan to sell the Government’s stake in Lloyds Banking Group, which has since been extended twice; in June and December 2015. The number of shares sold over the course of the trading plan is subject to an overall volume limit of up to but no more than 15% of the aggregate total trading volume in the LBG over the duration of the trading plan.
The final amount sold will depend on market conditions, among other factors. Shares will not be sold below the average price the previous government paid for them, which was 73.6p.
As outlined to the House at the time of the trading plan’s launch, a statement with further details will be laid before Parliament when the plan concludes.
Asked by: Richard Burgon (Labour - Leeds East)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, with reference to his Department's announcement on Government shares in Lloyds Banking Group, published on 18 December 2014, whether he had set a target for the (a) number of shares to be sold and (b) price per share for Lloyds Banking Group at the time of that announcement.
Answered by Harriett Baldwin
In December 2014 the Chancellor launched a trading plan to sell the Government’s stake in Lloyds Banking Group, which has since been extended twice; in June and December 2015. The number of shares sold over the course of the trading plan is subject to an overall volume limit of up to but no more than 15% of the aggregate total trading volume in the LBG over the duration of the trading plan.
The final amount sold will depend on market conditions, among other factors. Shares will not be sold below the average price the previous government paid for them, which was 73.6p.
As outlined to the House at the time of the trading plan’s launch, a statement with further details will be laid before Parliament when the plan concludes.
Asked by: Richard Burgon (Labour - Leeds East)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, what steps the Government has taken to ensure that former Northern Rock mortgage holders will not be disadvantaged by the sale of UK Asset Resolutions' Granite Portfolio to Cerberus.
Answered by Harriett Baldwin
A key consideration in the selection of the successful bidder was the continued fair treatment of customers. Cerberus was selected following a thorough due diligence process, and like any buyer, remains subject to the regulatory oversight of the Financial Conduct Authority; including the requirement of Treating Customers Fairly.
Day-to-day management of the assets within the Granite portfolio will remain with the mortgage servicing arm of UK Asset Resolution, and there will be no changes to the terms and conditions of the mortgages involved in the transaction.
Asked by: Richard Burgon (Labour - Leeds East)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, whether he took the National Crime Agency investigation into the Project Eagle loan sale by Ireland's National Asset Management Agency to Cerberus into account in decisions on the sale of UK Asset Resolutions' Granite Portfolio to Cerberus.
Answered by Harriett Baldwin
Cerberus was selected as the successful bidder for UK Asset Resolution (UKAR)’s Granite portfolio following a thorough due diligence process. Cerberus have confirmed to UKAR that their involvement in the Project Eagle loan sale was conducted with the utmost integrity; and have separately provided a detailed submission to the Northern Ireland Committee on Finance and Personnel, which conducted a full enquiry into the sale.
Asked by: Richard Burgon (Labour - Leeds East)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, when the book value of the UK Asset Resolution's Granite portfolio was last calculated prior to the sale of Cerberus on 13 November 2015.
Answered by Harriett Baldwin
In line with UK Asset Resolution (UKAR)'s reporting cycle, the book value of the Granite portfolio was last calculated at 30 September 2015 as part of the Interim Financial Results process.
Asked by: Richard Burgon (Labour - Leeds East)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, what steps the Government is taking to ensure that an approach supply of finance to productive investment is available to help increase productivity.
Answered by Greg Hands - Minister of State (Department for Business and Trade)
The government is committed to boosting productivity growth and narrowing the gap with other leading advanced economies. In July 2015 the government published ‘Fixing the Foundations: Creating a more prosperous nation’; a comprehensive plan that sets the agenda to reverse the UK’s long-term productivity problem.
The financial services sector has a dual role in supporting UK productivity. As well as its own productivity performance, it is critical for supporting the rest of the economy, allocating resources and facilitating long term productive investment. In the latest remit letter to the Financial Policy Committee of the Bank of England, the Chancellor highlighted the importance of a stable financial system providing finance for productive investment.
To promote the provision of finance to support productive investment, it is important that it can be measured accurately. The Bank of England, working with HM Treasury, have initiated research to create a better measurement of ‘finance for productive investment’ covering all asset classes and all stages of finance, with a view to publishing the data on a regular basis.
Asked by: Richard Burgon (Labour - Leeds East)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, with reference to the oral statement by the Economic Secretary to the Treasury of 11 June 2015, Official Report, column 1373, what the evidence base is for his statement that the Royal Bank of Scotland has not been able to play its full part in small and medium-sized enterprise lending because of public ownership.
Answered by Harriett Baldwin
The Chancellor has previously set out his objectives for the banks in state ownership, including Royal Bank of Scotland. We want to maximise the ability of these important banks to support the British economy, and we want to get the best value for money for the taxpayer.
Large scale public ownership has an inhibiting effect on the involvement of private institutions in a company such as RBS, and therefore naturally impacts on broader commercial performance. The best way to deliver our objectives is to return RBS to private ownership. Commercial organisations are more efficient, more innovative and more effective when they are in the private sector.
This policy is supported by advice from the Governor of the Bank of England and independent analysis from Rothschild investment bank. In their recent report into this issue, Rothschild note that by starting to sell down its stake in RBS, “the Government can bring about broader benefits for the institution, which could help to accelerate its recovery”, as well as improving the share price and securing value for the taxpayer.
Asked by: Richard Burgon (Labour - Leeds East)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, what impact assessment he conducted of (a) the reprivatisation of RBS and (b) any other policy options for the future of RBS before the commissioning of the Rothschild Review into the UK Investment in Royal Bank of Scotland.
Answered by Harriett Baldwin
The Government has been consistent and clear that its objective in respect of RBS ownership is to return the bank to the private sector in full.
This policy is supported by recent advice from the Governor of the Bank of England that “it is in the public interest for the Government to begin now to return RBS to the private sector”, and that “there could be considerable net costs to taxpayers of further delaying the start of a sale”. The findings of the recently published Rothschild report into the Government’s shareholding in RBS concur with this assessment.
Asked by: Richard Burgon (Labour - Leeds East)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, pursuant to the Answer of 16 June 2015 to Question 900337, from which bodies he has commissioned advice on the sale of Royal Bank of Scotland.
Answered by Harriett Baldwin
In announcing the sale of the Government’s shareholding in Royal Bank of Scotland, the Chancellor is acting on independent advice from the Governor of the Bank of England and a report from Rothschild investment bank that it is in the public interest for the Government to begin now to sell its stake. The report by Rothschild, and the corresponding advice from the Governor, are both available online at www.gov.uk.