Labour is calling on the Government to explore breaking up the Royal Bank of Scotland into regional banks, branding its decision to press ahead with privatisation as a “tragedy”.
Speaking at the Labour conference in Brighton yesterday, shadow Treasury financial secretary Chris Leslie said there are a number of other options for the future of RBS.
The Treasury is currently undertaking a study into whether it should split RBS into a good bank and bad bank, as recommended by the parliamentary commission on banking standards.
Archbishop of Canterbury Justin Welby has called for the bank to be broken up into a series of regional banks.Labour leader Ed Miliband has backed the creation of a German-style regional banking system.
The Government has started to sell its shares in Lloyds Banking Group but says it is not yet ready to sell its 82 per cent stake in RBS as the bank recovers from near bankruptcy in October 2008.
Responding to a question from Money Marketing, Leslie said: “I think it is a tragedy if the Government rules out a number of possible options for RBS such as a retail and investment split, a good bank/bad bank but also the regional banking option.
”It’s a tragedy the Government just ruled out a lot of these straight away and it looks as though it is not being very creative with what is a massive asset and a massive economic player in society. It shouldn’t just go back to business as usual which is seemingly the only conventional way the Government can think about it.”