We – you, me, the British public – own a bank!
We used to own two, before the government gave one away at a bargain basement price (i.e. at a huge loss).
So now we only own one bank.
It is the Royal Bank of Scotland (RBS).
We bought an 83% stake in it in 2008.
We OWN a bank – it has total assets of £1.6 trillion.
And, despite the headlines, RBS is not doing all that badly.
RBS has paid more than £2bn into the government’s ‘asset protection scheme’ without making a claim, and last year it lent £52bn to businesses (compared with a target of £50bn) and £15bn to mortgage customers (compared with a target of £8bn). Last year, RBS’s investment arm made a profit of £3.3bn.
We own a bank … so what’s the problem?
Given that we OWN the RBS, however, there are a number of matters that leave me scratching my head.
Forget the Stephen Hester/bankers’ bonuses fracas. The Tories promote people-power in the electricity-prices issue – shareholder-power, they suggest, might be the answer to over-inflated salaries.
And yet when they own 83% of the shares they fail simply to attend the shareholders’ meeting and say ‘No’.
We all know why, but it doesn’t harm to wave the inconsistency in their faces.
But it’s some of the other hand-wringing that is puzzling the hell out of me.
Quantitative Easing, we are told, is not working. The Bank of England is ‘printing the money’ and giving it to the banks … who then simply redeposit with the Bank of England as part of their deleveraging! It isn’t getting through to the small businessmen who need it.
But – d’oh – don’t we own a bank?
Can’t we simply use our own bank to get the QE money directly out to industry?
Give the QE money to the RBS, and instruct it to pass it on to industry.
We own the bank!
Lending to Small Businesses
One of the major barriers facing British industry, we are told, is lack of easily available finance.
Realising this, Ed Miliband is proposing that we set up an ‘Investment Bank’.
But hang on, Ed … we already own a bank!
Why don’t we simply instruct our Bank – the Bank we own – to do with a tiny fraction of its £1.6tr assets what you are considering messing on setting up some piddling state-formed body to do?
The Green Investment Bank
Meanwhile, the government is struggling to set up a ‘Green Investment Bank’, with a capital of £3bn, in order to stimulate a ‘step up’ in private investment green infrastructure projects.
It is due to start lending – a measly £775m – in April 2012, but continues to face problems, not least about where the money will come from (one suggestion is to use QE money) but also about how much control the Treasury will have over its borrowing powers.
But … we already own a bank!
Can anybody tell me why we are messing about trying to start a bank from nothing when we already own one?
And at a time when commentators are seriously wondering whether the banking sector is just too big for national governments to save if/when the euro-collapse comes.
We own a bank!
Perhaps we won’t be able to save the banking sector, but perhaps we might be able to save one bank … our own?
When Northern Rock failed and was taken over by the government, I was one of those people who put money into it.
I was not interested in huge yields … I was interested that my money might be secure, and I reckoned that putting it in the government’s bank was just about as secure as you could get.
I felt betrayed when the Tories sold it at a loss to Virgin.
So I wonder whether many other ordinary people might be interested in putting their money in a ‘secure-as-possible-government-owned’ RBS … especially if the savings division was ring-fenced from the investment arm?
We own the bank.
We could even use it to address all those other failings of the banking sector – over-demanding mortgage terms, blind-person-unfriendly cash dispensers, closing branches in the countryside etc.
We can make it do what WE want.
To give him his due, on the very day I sat down to write this Rant, I stumbled across this Reuters report in which Vince Cable, apparently, is saying much the same thing!
Good on him – he’s right.
We OWN the RBS.
We can do with it what we like.
Our Lunatic Government
Of course, the reason that we are NOT actively running RBS in the country’s interests is because, when we took it over, we promised, didn’t we!
We promised that we wouldn’t interfere in the way it was run as a normal bank.
You have to take your hat off to the lunacy of our government.
Can you imagine what terms private capital would have insisted upon if they had had to bail out the government to the tune of £45bn!
And if you want a benchmark, you only need to think of the ruinous terms upon which they have advanced the money for the PFI projects they have undertaken.
But, no, our civil servants continued their unerring ability to forge deals with the private sector which ruin us and line its pockets with gold.
RBS cost us £45 billion – we paid 50p a share, although its shares were trading at 11p at the time, and are still not worth much more than 25p.
And, when we took it over, we promised not to interfere in its operations – with the result that it has continued to screw the public like every other bank.
Last year, it traded at a £1.13bn loss, as a result of which it plans to sack 24,000 employees and add to the recession. Over the same period, RBS paid its investment bankers bonuses of about £950m and one hundred of its employees earned more than £1m.
And now, of course, that its losses are beginning to drop down from catastrophic, we are already beginning to talk about how we can nobly put it back into private ownership … no doubt at a similar ruinous loss to the Northern Rock deal.
I know, when that time comes, I will be regarded as odd for proposing a 'save the RBS for public ownership' campaign ... but we ought to run one.
We sat back and let them give away all the other nationalised industries, but this is something we MUST keep.
This government has cut legal aid for ‘social’ cases … to save £350million. It refused a proposal from the Spartacus campaigners to support children who are born disabled because it would have cost … £11m.
Yet they continue to support the fat cats with ‘deals’ which sign away sums which add five or six noughts to such figures.
Words cannot convey the disgust I feel.
But I will say this.
What’s done is done.
We own a bank…
Let’s USE it.