Royal Bank of Scotland (RBS) is a publicly-owned bank. The overwhelming majority of its shares are in state hands, 73% of the equity. Yet it was the only major bank to fail outright the recent ‘stress test’ of its balance sheet conducted by the Bank of England. The bank is a basket-case. It is costing all of us money, and yet it could be a key contributor to economic recovery.
For many years the left has called for the nationalisation of the banks. This happened as a result of the financial crisis. But with very few exceptions the left had very little to say about what the public sector could do with its newly-acquired and deeply damaged assets. That was an error. Now that the left leads the Labour party and could be in position to lead the next government, it should use every lever at its disposal to produce an investment-led recovery. RBS should be seen as one of those levers. Continue reading
Osborne as usual is taking advantage of Labour’s distraction at this time to sell off RBS and Lloyds to the private sector at a huge losses to the taxpayer, to accountability of the banks, and to the future of the British economy. This is motivated by his ambition eclipse even the Thatcherite privatisation boom of the 1980s and to oversee the biggest ever sale of publicly owned corporate and financial assets in one year, as well as of course elevating his prospects for the coming Tory leadership race and premiership. But what may be good for his party and for him will certainly not be good for the country. Continue reading
Why sell off the 80% stake in RBS when the Brown government bailed it out in 2008 at a cost to taxpayers of £45bn, yet today’s share price would fetch only some £32bn? That’s a £13bn loss for taxpayers which, as it happens, is almost exactly the sum that Osborne is pledged to raise by cutbacks to disability benefits, industrial injury benefits, child allowances, and tax credits. Osborne declared two years ago about the RBS and Lloyds bank shares that “we want to get the best value for money for the taxpayer”, which is patently the opposite of what he’s now doing. His only bolt-hole is the highly dodgy statement made by his advisers Rothschild that if all the bank’s shares were sold now, including fees, it would make a £14bn profit. But that is a brazen deceit. It not only excludes the £17bn cash cost of the bailouts, it also ignores the guarantees, soft loans and subsidies the government extended to the banking sector as a whole. If all that is taken on board, as it should be, the taxpayer ploughed into the stricken banks as much as £1.2 trillions, according to the IMF. Why isn’t that being repaid in full? Continue reading
There is a very noticeable difference between the way that the Tories and Labour have conducted this election.
The Tories have used the twin-prong approach: personal vilification which has proved counter-productive and now blatant giveaways (of other people’s money) to try to produce a false feel-good factor. However, no serious policy proposals for the country’s increasingly dire social and economic problems, especially the triple deficit problem of a budget deficit of nearly £100bn, a balance of payments deficit of over £100bn, and a productivity deficit that means living standards can’t rise. Continue reading
The more that comes to light about the nefarious activities of the Big four banks, the more extraordinary it is that these banks (a) demand a return to business as usual (which of course caused the financial crash in the first place), (b) continue to fight back against any reforms of a dysfunctional finance sector, feeble though these measures are, (c) show not a scintilla of remorse or apology for the decade of disaster they’ve imposed on ordinary people and the economy as a whole (remember Bob Diamond’s infamous comment “It’s time to move on” as though nothing had happened), and (d) have never been held to account by prosecutions of the chief executives, finance directors and other executives responsible. This is all the more staggering when what has now been revealed is the enormous extent to which all 4 banks not only indulged in, but actively promoted, tax evasion/avoidance on an industrial scale. Barclays has 385 subsidiary companies in tax havens (36% of all its subsidiaries), HSBC has 550, Lloyds has 290, and RBS has 404! Continue reading