BREAKING NEWS

BREAKING NEWS

Labour would halt RBS privatisation - shadow minister

Labour would halt RBS privatisation - shadow minister
@ Copyright :
Neil Hall(Reuters)
Text size Aa Aa

By Iain Withers and Lawrence White

LONDON (Reuters) - Britain's opposition Labour party would halt privatisation of state-rescued Royal Bank of Scotland (RBS) if it came to power but refrain from day-to-day meddling, the party's shadow banking minister told Reuters.

RBS remains 62 percent owned by British taxpayers after a 45 billion pound bailout in the 2008 financial crisis, though the Conservative government has conducted two share sales as it looks to return the bank to private ownership.

Labour's plans for the bank are among scores of policies in sharper focus as Brexit turmoil raises the chances of a change in government, though the latest poll from research consultancy Opinium shows the socialist party has dropped seven points behind the Conservatives.

Having previously suggested full nationalisation of RBS, Labour has been rowing back from that position as it seeks to build bridges to the City of London and ease concerns about a Labour-led Britain.

The government's two RBS equity sales so far have crystallised deep losses for British taxpayers on shares that have almost halved in value since the bank's rescue.

"If RBS is now paying dividends, and the price of the shares is under what was paid, we cannot see the rationale for selling more shares," said Labour's Jonathan Reynolds.

RBS shareholders are set to vote on Wednesday on the bank's plans to begin buying back its shares from the government to accelerate a return to majority private ownership.

"The timing and price of any government share sale is a matter for the Treasury. Our focus continues to be on building a bank that delivers for shareholders, customers and the UK economy," an RBS spokesman said.

The Labour party, meanwhile, has cooled on plans to nationalise or break up RBS, Reynolds said.

He said those options have not been ruled out totally, but the extent of state interference would depend on RBS's willingness to increase lending to Britain's regions and small businesses.

“We don’t have a policy of day-to-day control of RBS," he said. "But there is clearly unmet demand in lending and a problem with financial inclusion.”

The softening of Labour's position on the lender is intended to reassure bankers concerned about the intentions of the party's left-leaning leadership.

Labour is also considering ditching its so-called "Robin Hood Tax" on financial transactions, first suggested in May 2017 as a means of raising 26 billion pounds to invest in public services.

"The financial transactions tax was a revenue-raising proposition at that time ... we are talking to the City about alternative ways of raising that," Reynolds said.

Labour's leadership has previously made no secret of its antipathy towards Britain's banks. “So when they say we’re a threat, they’re right: We’re a threat to a damaging and failed system that is rigged for the few," Labour leader Jeremy Corbyn said in December 2017.

But the party has been stepping up its engagement with bankers to allay their concerns.

Last week Labour opened a monthly "City surgery" in the heart of London's financial district, where professionals can meet the political party's team to help provide a better understanding of its policies, Reynolds told Reuters.

(Reporting By Iain Withers and Lawrence White; Editing by Sinead Cruise and David Goodman)

euronews provides breaking news articles from reuters as a service to its readers, but does not edit the articles it publishes. Articles appear on euronews.com for a limited time.