The £45 billion the previous Government put into RBS represents the largest single bank bail-out in the world. This Government was not responsible for the bailout of RBS or the price paid then for shares bought by the taxpayer, but it is responsible for getting the best deal now for the taxpayer and doing what is right to support the British economy.
I believe that starting to sell the Government’s stake in RBS is the right thing to do on both counts. As the Governor of the Bank of England said earlier in the year: “it is in the public interest for the government to begin now to return RBS to private ownership”. That return “would promote financial stability, a more competitive banking sector, and the interests of the wider economy”. Indeed there could be considerable net costs to taxpayers of further delaying the start of a sale.
Starting the return of RBS to the private sector was also the conclusion of an independent review conducted by Rothschilds on behalf of the Government. It concluded that beginning sales and increasing the free float would improve the marketability of the remaining stake – meaning we can expect to see larger sales on better terms in the future, but only if we start now.
The longer we wait to return RBS to the private sector the higher the price the whole economy will pay. It is the right thing to do for British businesses and British taxpayers. Now is the time for RBS to rebuild itself as a commercial bank; no longer reliant on the state, but serving the working people of Britain.
I am pleased that the financial services sector is now fundamentally stronger thanks to our reforms. The debate was centred on the future of the banking system and the importance of having a strong, healthy and diverse sector. I am firmly of the view that our economic plan is bringing stability and competition to the UK banking sector and delivering a better deal for hard-working people across the country.