THE UK Government has been accused of “burying its head in the sand” after refusing a call from a Commons committee to use its majority stake in Royal Bank of Scotland to halt the branch closures programme.

The cross-party Scottish Affairs Committee had urged the UK Government that, if the bank did not act on its recommendation to stop the closures, then if should “use any influence that its majority shareholding provides to apply pressure on RBS to reconsider the closure programme”.

But the Government declined to do so, declaring: “Governments should not be in the business of owning banks; nor should they intervene in the commercial, operational or management decisions of business.”

Such decisions, it argued, were rightly the responsibility of boards and management teams, who were “best placed to set strategy and commercial direction and to make day-to-day management decisions”.

Last December, RBS announced it would shut a total of 62 branches north of the border but later ten of them were given a stay of execution until at least the end of this year, pending a review.

Committee member Danielle Rowley, the Scottish Labour MP for Midlothian, said the Government’s response was disappointing and showed it continued to “wash its hands” of branch closures.

“But if it continues with its stated aim to return RBS to private ownership without making a strategic intervention to solve this problem, taxpayers will rightly ask what good their investment did beyond the initial emergency bailout,” she said.

Ms Rowley accused the Government of being "wedded to their dogma that the state has no role in the commercial banking sector,” and claimed the Tories were missing a golden opportunity to make a positive difference and support communities across Scotland.

Noting how in her own constituency Bonnyrigg had lost the last bank on the high street and was now facing the prospect of losing its Post Office too, the backbencher added: “The evidence gathered by the committee was clear and our recommendations were reasonable. It is unfortunate that the Government has chosen to bury its head in the sand."

In 2008 following the financial crash, the taxpayer bailed out RBS to the tune of £45 billion.

In June when the Government sold off another tranche of shares – at a loss of £2.1bn – the public stake in the bank fell from 70.1 per cent to 62.4. The sale raised £2.5bn.

The Government has said it intends to sell £15bn-worth of RBS shares by 2023. The overall loss to the taxpayer is set to be around £26bn.

In February, the bank reported an annual profit of £752 million; its first for a decade and a sharp turnaround from the £6.95bn loss seen the previous year.