Cable calls for RBS to be split up

 
Vince Cable Vince Cable also wants the government to show more leadership

Vince Cable has called for Royal Bank of Scotland (RBS) to be split up, in a letter leaked to the BBC.

Writing to Prime Minister David Cameron and Deputy Prime Minister Nick Clegg, Mr Cable said RBS should be turned into a new "British business bank".

Mr Cable also said the government needed to show "more leadership" in supporting key technologies.

He added that the government lacked "compelling vision".

Writing about RBS, of which the government owns 82%, Mr Cable said: "My suggestion is that we recognise that RBS will not return to the market in its current shape and use its time as ward of state to carve out of it a British business bank with a clean balance sheet and a mandate to expand lending rapidly to sound business."

BBC business editor Robert Peston said this suggestion was "a big point of difference" with the Treasury, which wants RBS to be sold off as soon as possible.

'Storm'

Our business editor added that Mr Cable's letter, dated 8 February, gives a "brutally frank analysis of what he sees as the shortcomings in the government's industrial and economic policies".

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What may be seen as extraordinary is that he appears to be criticising in part the work of his own department”

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Mr Cable also uses the letter to say that the government responds to crises after they have developed, instead of being more strategic and proactive.

Our business editor said: "Whether his colleagues, especially his Conservative colleagues, will welcome the implication that the government is the slave of events, rather than the master of them, is questionable."

Mr Cable, one of the most senior Liberal Democrats in the coalition government, told BBC Five Live that his letter "certainly wasn't a comprehensive attack on the government's economic policies".

He added: "This is an enormous storm made out of something much less.

"I think a great deal about what the government is doing, and what my department is doing."

'Roadblocks'

Downing Street has said it does not comment on leaks, or on correspondence between ministers.

Vince Cable: "The letter is certainly not anti-government"

Chuka Umunna MP, Labour's shadow business secretary, said Mr Cable's letter "underlines the extent to which the Department of Business lacks clout and has become marginalised".

He added: "It is becoming increasingly clear that David Cameron and George Osborne have become roadblocks to the modernisation and reform needed to create a more productive economy."

John Walker, national chairman at the Federation of Small Businesses (FSB), said he welcomed "the debate that the business secretary's letter will bring".

He added: "As the FSB has long said - tinkering around the edges will not help.

"We need bold action - such as he suggests on RBS - and as such have called on the government to establish a small business administration to fully champion the needs of small businesses."

 

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  • rate this
    +17

    Comment number 145.

    Absolutely nothing wrong with what Vince Cable has said here.

    We're on a knife edge so to speak and at the moment we're slowly making headway . Recent announcements from Nissan and Tesco for example are all good news but for every large positive there are hundreds of smaller negatives which still make me very wary of the future (and especially the unpredictable EU).

    But let's Keep Calm and ...

  • rate this
    +42

    Comment number 114.

    I wonder how many of the critics actually bothered to read his letter before jumping to criticise the man? The letter sets out some quite level-headed arguments for what we should be doing to support growth.

    Analysis and criticism of government policy is fundamental to implementing more effective measures in the future. Critics would do well to read his suggestions first, most make perfect sense

  • rate this
    -1

    Comment number 99.

    I would expect that such frank discussions take place all the time in government who ever is in government.

    As far as having "a compelling vision of where the country is heading beyond sorting out the fiscal mess" goes, there is nothing more important than sorting out the mess. I'd rather the government continues to concentrate on that.

  • rate this
    -3

    Comment number 69.

    All the lib dem bashing is so stupid. people say that the lib dems promised things and now they are in power have gone bavk on them. in power the lib dems arent. a coalition they are in. torys hold more power and the fact that they have done some good things have gone over peoples head. Stop look at listen.

  • rate this
    +88

    Comment number 68.

    After reading Vince Cables letter, I fail to understand what the problem is. He has pointed out the failing of all British governments, a lack of forward planning and an over reliance on the market economy. The truth is small and medium companies are the best way for the economy to start growing. So give them as much support as we can, even if it is government money and plan for 15 years not 5.

 

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