Royal Bank of Scotland

Lord Tugendhat Excerpts

Wednesday 13th June 2018 Lords Chamber

[Lord Bates]

First, on the share price, the noble Lord will be aware—he was on this side of the House at the time it happened—that the shares were purchased for £5 per share. Within three months they were worth £2.20 per share, and we sold them at £2.71. They flatlined for about nine years. Rightly, because of the instruments that were set up by the previous Labour Government, these sales are done by arms-length bodies, so UK Government Investments takes independent advice. They are strictly governed as regards when disposals can take place, to ensure, quite rightly, that we are not in possession of any information which the market is not aware of. Those are established practices; therefore, it was right that actions did not take place while the decision by the US Department of Justice about the scale of the fine was not in the public domain. They have followed those procedures, and we follow them independently, but we are dealing with the legacy issues of some very concerning behaviour.

[Lord Tugendhat (Con)]

My Lords, does my noble friend not agree that, although the noble Lords opposite have raised important points, the sale of shares in RBS cannot be dictated by a single situation such as the noble Baroness seems to suggest? It is not just a question of whether the shares can be sold at a profit. They were bought in a distressed situation by the last Labour Government for reasons that we all understand. Now the sale must depend not just on the current market situation but on the way in which the Government feel the market might move in the future and whether the bank would be better off outside the Government’s purview than within it. It might well be able to conduct its business more effectively.

[Lord Bates]

My noble friend is absolutely right. The RBS shares were acquired not as an investment but as a rescue, and all parties supported that systemic action to restore confidence in the sector. When you are left with a large proportion of stock on your hands and you have stated publicly that you want to dispose of that asset, the only way to do it is on independent advice and over a period of time to avoid any market fluctuations, and that is what has been done.