Five years ago, Britain’s government had to rescue its banks from collapse. It falls to the present government to prepare a coherent plan for returning bank shares, bought by the state at that time, to the private sector. However, the coalition seems intent on letting politics, rather than economics, determine this crucial sale.
For example, they are suggesting that the last Labour government overpaid for the shares it acquired in 2008, when I was chancellor. It is true that we could have wiped out the shareholders by nationalising the bank. But the Conservatives bitterly opposed the nationalisation of Northern Rock. It is odd that they are complaining now. In any case, by taking shares, Royal Bank of Scotland remained a listed company, making it easier to sell when its recovery was complete.
The Conservatives might want to reflect on the fact that, on the eve of the 2010 general election, two things were happening. One was that the British economy was growing. The other was that RBS’s share price was 504p. We were up on the deal by ￡500m. Today, after three years of austerity, political interference and whispering about the bank’s management, we are ￡18bn down.