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Government Holdings (RBS)

Volume 507: debated on Tuesday 16 March 2010

14. What recent discussions he has had with UK Financial Investments Ltd on its management of the Government holding in the Royal Bank of Scotland. (322198)

The Treasury holds frequent discussions with UK Financial Investments on a range of topics related to the Government’s holdings in RBS, in line with the investment framework and investment mandate.

Does my hon. Friend accept that it is very difficult for me to convey the absolute anger of a number of my constituents, especially small businesses, many of which have been forced to the wall because of the lending policies of those institutions? Does he accept that that is all the more repugnant given that RBS found £1 million to pay 100 executive bonuses last year? Clearly, something has to be done.

My right hon. Friend will be aware of my comments on bonuses and what RBS has said on the matter. It is certainly the case that some businesses have, sadly, gone to the wall as a result of the global recession. The Government have always been consistent in pressing to make sure that lending continues in the UK economy. He might be aware that RBS recently announced a £1 billion manufacturing fund for providing flexible long-term loans to businesses. I am sure that that will be welcomed by businesses in Scotland and throughout the UK given RBS’s role right through the UK economy.

Does the Minister accept that the question of the RBS debt is central to the question of public sector debt generally? Does he disagree with the Office for National Statistics that the total amount of debt is between £2.65 trillion and £3.15 trillion, or between 185 and 215 per cent. of gross domestic product when financial sector interventions are included?

I do not have the figures from the ONS to hand, but I have no reason to doubt the hon. Gentleman. It is established practice when reporting on Government accounts to exclude financial interventions in RBS and Lloyds Banking Group. In the same way, the German Federal Government tend to exclude KfW and their investments in banks. I do not think that anything we are doing is particularly unusual and, as we have discussed before, there are different methods of accounting, which are at issue. I do not think, however, that party politics should be part of that. We are clear and transparent about the overall financial situation.