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.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereLast Updated:
Report this comment Cancel