Ben Chu: We're being cuckolded by RBS. It's time for the Coalition to nationalise

Outlook Power without responsibility, as Stanley Baldwin noted, was the prerogative of the harlot through the ages. So what does that make "responsibility without control", as Vince Cable described the Government's teeth-grindingly frustrating relationship with the Royal Bank of Scotland? Here's a suggestion: the prerogative of the cuckold.

Ministers find themselves behaving like a pathetic husband who picks up the bills of an unfaithful wife but who is powerless to prevent the missus racking up huge bills as she entertains her legions of gentleman friends. This husband also has to pay for the legal fees of this wayward spouse, bailing her out of jail when she gets caught shoplifting (or fixing interest rates). Yes, the husband has promised to dock her allowance as a punishment, but the broad guarantees of her credit remain in place, ensuring that she never truly feels a compulsion to reform.

So what's the solution to this plainly abusive relationship? What do you do with a bank that you fund, but don't control? The Business Secretary hinted, once again, at a divorce, dredging up the idea of distributing RBS shares to the public. A nice idea in a perfect world. But back on this planet such a dispersal would be a disaster. Even the few scraps of influence the Government has over the tottering bank, which still accounts for a colossal share of lending, would be lost.

That leaves full nationalisation, recently recommended by that radical, socialist firebrand Nigel Lawson. Impractical, says Vince. "Full nationalisation would cost the taxpayer billions and, except in a new financial emergency, this is unlikely to take precedence over other claims on spending," he said.

This is feeble. The market capitalisation of RBS is presently about £20bn. This implies that it would cost the Government about £4bn to buy out the fifth of the bank that it doesn't already own. As the Institute for Fiscal Studies pointed out, the Government is already planning on borrowing £64bn more in 2014-15 than it planned at the time of George Osborne's "emergency" June 2010 Budget. Why on earth would ministers choke on an extra £4bn?

Would the public blow a gasket at a few extra billion quid spent in purchasing the remaining 20 per cent of RBS shares in private hands? Newsflash: the gasket of public tolerance over this bank has already blown. If ministers want any evidence of that fact they should head down to the biggest pub in their constituency with the latest transcript of the conversations between RBS's Libor-fiddling traders in their hands and convene an impromptu discussion group.

If the Coalition framed the nationalisation as a way of preventing the bank paying any bonuses whatsoever to these jackals, and as a way of finally getting lending to credit-starved small businesses, my guess is that the public would welcome the buyout with open arms.

The Coalition is fond of claiming that it is cleaning up after the mistakes of Alistair Darling and Gordon Brown. This is mostly baloney: the bulk of the deficit is a consequence of the financial crisis rather than overspending by the last government.

But one area where those two aforementioned politicians did leave a reeking mess was in the half-nationalised RBS. So why on earth don't Mr Cable and the Chancellor actually live up to their rhetoric, don their rubber gloves and nationalise this confounded bank in the name of the public good?

Or do they imagine that taxpayers secretly enjoy being treated like cuckolds?

Start your day with The Independent, sign up for daily news emails
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine
Letterman's final Late Show: Laughter, but no tears, as David takes his bow after 33 years

Laughter, but no tears, as Letterman takes his bow after 33 years

Veteran talkshow host steps down to plaudits from four presidents
Ivor Novello Awards 2015: Hozier wins with anti-Catholic song 'Take Me To Church' as John Whittingdale leads praise for Black Sabbath

Hozier's 'blasphemous' song takes Novello award

Singer joins Ed Sheeran and Clean Bandit in celebration of the best in British and Irish music
Tequila gold rush: The spirit has gone from a cheap shot to a multi-billion pound product

Join the tequila gold rush

The spirit has gone from a cheap shot to a multi-billion pound product
12 best statement wallpapers

12 best statement wallpapers

Make an impact and transform a room with a conversation-starting pattern
Paul Scholes column: Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?

Paul Scholes column

Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?