RBS — House of Lords, 2015-06-11
Topic: Mixed Topics
Thomas Ashton (Conservative, Centre-right): My Lords, I thank the noble Lord and the noble Baroness for their remarks. First, the noble Lord opposite commented on the mention in the Statement of the economic plan. The long-term economic plan is the reason we are able to make this sell-off at the moment and why we think that it is for the benefit of the nation to do this now. We make no apologies for mentioning the long-term economic plan, which has been so successful The noble Lord referred to a rush to sell. There is no rush to sell and there is no question of a fire sale. The Government—the nation and the taxpayer—own 79% of RBS, and there is no question of selling the whole lot as a fire sale. At the moment, we are going to sell bits of it in tranches, first to institutions: that is the way that is most suitable and the way recommended both by the Governor of the Bank of England and by independent advice. We have met the tests that the noble Lord, Lord Davies, mentioned. We will obviously get as much as we can for the sale and certainly intend to get value for the taxpayer. If all goes well, based on prices at 5 June, there will be £14 billion more than we paid to rescue the banks. It is not unreasonable to put those together, because this is part of the overall government strategy of returning these banks to private hands so that they can operate in a more effective way I completely agree with the noble Lord opposite that it is the Government’s judgment in the end to decide on the price. It is the Chancellor’s responsibility to get the best price for the Government, and he is perfectly prepared to take on that responsibility. In fact, he mentioned in his speech that it would be much easier for him to wait until the share price went up and not do the initial tranche at a loss. However, he is not going to do that, but is going to make the right decision for the country The noble Lord, Lord Davies, asked why we do not have a red line, as with Lloyds. We are going to allow the sale to happen in tranches, as I said, and the price will depend on what happens as those individual tranches go through. It is a bit rich for a party that sold gold at an all-time record low in government to complain about Royal Mail and getting the price wrong It is true that the Chancellor made his annual Mansion House speech to bankers. That is a perfectly normal place to talk about economic policy. I have some sympathy with the noble Lord’s last point, when he asked why the Chancellor did not make the Statement himself and why the Treasury Minister here did not repeat it. I have to be honest and say that I asked that question too, but of course the reason is that my noble friend the Minister is doing important government work elsewhere for the benefit of the nation The noble Baroness, Lady Kramer, was honest enough to admit that she has been away from the markets too long to quote the correct price, unlike the noble Lord opposite. She referred to a fire sale. We are not, as I said, selling this all at once. The pricing of these things is very difficult, and it is important to know that the loss that people are talking about is only if we sold all of our 79% share at the existing price that pertained on 5 June. The loss or profit may go up and may go down. That of course applies to the overall £14 billion profit that I quoted, which is dependent on the price that pertained on 5 June The noble Baroness referred to a lost opportunity to reorganise RBS before we sell it off. That is a slightly different theoretical question. It is an important one, but it is beyond today’s remit and the question of price. However, it is important to know that our strategy in selling banks and putting them back into the private sector is because we want them to do their job properly of supporting SMEs and British business. They will do that better in private hands. That is what our independent advice told us. The governor was very clear about that.