Debate in House of Commons
Report urges halt to RBS sale and break up into local banks
George Osborne will be urged today to abandon his sale of shares in Royal Bank of Scotland and instead break it up into a network of local banks with a public service mandate.
Research from the New Economics Foundation (NEF) has demonstrated how this would change the face of UK domestic retail banking and bring significant economic benefits.
The NEF has made comparisons with public savings banks in Germany and Switzerland and estimated that Britain would have been £7.1 billion better off had localisation taken place in 2008, the year RBS collapsed..
Today’s Commons debate comes as campaigners Move Your Money release new Populus public opinion polling showing 75% oppose the sale of RBS, 82% believe that RBS should work in the public interest and 67% agree that the government should launch a full, independent review into the bank’s future.
Christine Berry, senior researcher, New Economics Foundation says: “The Chancellor’s decision to press ahead with a fire sale of RBS to the private sector without structural reform or proper scrutiny risks a reckless repeat of past mistakes – coming at a time when warning signs are mounting that the next crisis may not be far away.
“Today’s debate shows that there is clear support for a different approach, both among MPs and the general public. It’s high time for the government to suspend its fire sale of taxpayers’ shares in RBS, and to order a proper rethink of the bank’s future so that it serves the public interest.
“The UK still has one of the most concentrated and least diverse banking systems in the developed world and this makes us vulnerable to future financial shocks. Our public stake in RBS presents a unique opportunity address these structural flaws by turning it into a network of local banks, modelled on the successful German system, and serving ordinary borrowers and small businesses alike.”