Royal Bank of Scotland

Roger Mullin Excerpts

Thursday 11th June 2015 Commons Chamber

[Harriett Baldwin]

I congratulate my right hon. Friend on his unopposed re-election as Chair of the Treasury Committee. That he asks a question about the footnote illustrates his forensic reading of the published materials. As he knows, at the end of 2009 the estimate was that the cost of bank interventions would range between a £20 billion loss and a £50 billion loss. As of last week, the Rothschild report estimates that that situation has completely turned around, and that the overall recovery from the bank interventions is in the order of a £14 billion magnitude. The overall cost of funding on our Treasury issuance is at record lows thanks to the prudent economic management of my right hon. Friend the Chancellor.

[Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)]

I welcome early sight of the statement.

The Government are fond of talking about long-term economic plans—[Hon. Members: “Hear, hear!”] Absolutely. However, a sell-off is not a strategy, and a strategy for the banking sector is completely missing from the statement. My first question is this: is it not the case that there remains scope for a proper review of the options for the future of RBS, such as the consideration of creating challenger banks out of it? Secondly, yesterday I asked the Secretary of State for Scotland about the branch closures the length and breadth of the country that are being announced by RBS. Is that part of the price that people are expected to pay for this rushed sell-off? Thirdly, the statement mentioned concern about the drag on the economy and the poor performance in supporting small and medium-sized enterprises, so will the Minister explain precisely how the policy will further strengthen the SME sector?

[Harriett Baldwin]

I welcome the new hon. Member for Kirkcaldy and Cowdenbeath (Roger Mullin). What a refreshing change it is.

The hon. Gentleman asks about Royal Bank of Scotland in particular. I gently point out that if the Scottish National party had won the independence referendum, there would be no ability to intervene in the banking sector in the way that the UK Government intervened.

The role that Royal Bank of Scotland plays as the most significant lender in the SME sector is critical. It has not been able to play its full part because of public ownership. The Bank of England letter states that a phased return of RBS to private ownership would promote financial stability and lead to a more competitive banking sector, in the interests of the wider economy.