RBS and the Government are stuck with each other. That shouldn't change until the taxpayer is in profit

The prospect of a huge US fine is preventing Chancellor Philip Hammond from selling any more shares. Even when the bill has been made clear, there should be no more sales until the taxpayer is in profit

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The Independent Online

That RBS share sale? It’s just about dead in the water. Whether the bank and the Government like it or not, they’re stuck with each other. 

There is no way Chancellor Philip Hammond, sorry, UK Financial Investments (which is supposed to manage the state’s interests in banking at arm’s length from the Government) can sell up, not with the threat of a $12bn (£9.6bn) US fine for mortgage mis-selling hanging over it. 

Of course, we don’t know whether that $12bn figure is for real. It might be $8bn. It might be $5bn. Perhaps RBS can do a deal. President-elect Donald Trump keeps banging on about how much he likes deals.

Regardless, nothing will move on the issue of that fine until his team is in place and that might take some time, given the chaotic way the transition is being handled.

The uncertainty that leaves RBS facing must be a killer for poor Ross McEwan, the bank’s embattled chief executive. It must make actually running the thing all but impossible. How can he make any strategic decisions when he’s driving with busted brakes and a front-seat passenger that’s holding a gun to his head?

It would be insanity, particularly were the back-seat driver from No 11 Downing Street (sorry, the back-seat driver from UKFI, wherever they’re based these days) to keep moaning and asking “are we there yet?”. 

It’s not as if Mr Trump’s Department of Justice is the only problem Mr McEwan has to deal with. 

There are several other messes his predecessors have left him to mop up as well, such as the disgraceful way some of the bank’s struggling small business borrowers were treated. 

Talk about impossible jobs. 

The prospect of the Government trying to press ahead with a loss-making share sale is just one more distraction that this bank doesn’t need when its focus should be on fixing the problems of the past. And on compensating those that were hurt by the cavalier actions of previous management teams that previous shareholders did too little to rein in.

Even when the bank has a better handle on how much its various issues will cost it, the Government should still sit back, put on the headphones and carry on with the journey.  

It would be rather a good thing for it to set an example to the City by behaving as a responsible long-term investor, exercising oversight on the executive team led by Mr McEwan and supporting him when he does the right thing.

If Mr McEwan is correct, if there is indeed a “good safe bank” under all the gunk, as he says there is, then why not allow it to emerge and so the taxpayer can profit from it when it is fully on display?

Were Mr Hammond, sorry, UKFI, to do that, were he, sorry it, to start selling at a time when the taxpayer is in profit he, they, would have something to crow about. 

Look, see here, unlike George Osborne, we stuck to our guns, and acted as responsible stewards of the taxpayer’s stake. We sold up when we were able to show the taxpayer a profit. 

Even if it takes some time, that would be quite a win for Mr Hammond (and for UKFI). He’s part of a Government that really could use some wins.