I was watching RBS announce losses of £1.5bn this morning, and reckoned that the current rules regarding RBS are bonkers. The rules, drawn up when the last Labour government bailed them out, means that, although the taxpayers own 82% of the company, we do not have a rep on the board and cannot force the company to lend money to businesses and create jobs.
Yet, quite rightly, the public hold the government responsible when the Bank doesn’t lend money and creating jobs
As long ago as March, Business Secretary Vince Cable was arguing for a different approach. Nationalise the Bank fully (to change the rules keeping the current structure would be a legal minefield), change the rules, set up RBS as a State Bank, and force the State Bank to lend money and create jobs.
Vince is right. Full nationalisation of RBS would recognise that the current rules are not working, that selling off to the private sector is not going to happen in the short-term, and give the UK a state bank that can make investment decisions that can prioritise job creation and growth in the economy.
It would be better than the current mess, where the government is responsible but cannot act.