Our campaign to stop the RBS sell-off scored a big victory this week as Labour announced plans to keep the bank in public ownership, with a new focus on productive investment. We are proud to be working alongside We Own It and the New Economics Foundation on this campaign.
We’ve warned that the sale of RBS would be a historic missed opportunity to reform Britain’s broken banking system. Labour’s news is a victory for the thousands of us who signed the petition, emailed MPs and crowd-funded a YouGov poll which was reported in the Independent, Guardian and FT.
Labour’s new proposals mark a shift in its position. In February, Reuters reported that the party had cooled on plans to nationalise RBS, with shadow City minister Jonathan Reynolds saying that a future Labour government would not “have a policy of day-to-day control” of the bank.
As well as committing to keep the bank in public ownership, Labour plans to give RBS a new mandate to support productive investment, for example in small and medium businesses, green industries and manufacturing. A Labour government would also cancel the bank’s programme of branch closures. RBS has closed over 400 branches in the last two years alone.
This echoes our petition, which made the case that the Government’s ownership of RBS offers an opportunity to reshape the UK banking system:
“The bank should be given a mission to lend to small businesses, provide services to neglected consumers, and support the parts of the country still reeling from the 2008 crash that banks like RBS helped cause.”
Labour’s plan is based on a report by Christine Berry and Laurie Macfarlane for the Democracy Collaborative and Communication Workers Union. Its commitment to retain public control of RBS is part of a bigger plan for a shake-up of the banking system, including the creation of a new retail bank providing services via the Post Office network alongside a new national investment bank and network of regional development banks.
The shakeup is sorely needed. The UK’s banking sector is still dominated by a small number of large, shareholder-owned banks, with the biggest four accounting for over 80% of deposits. As our research has shown, most of their lending flows towards property and financial markets, inflating asset prices and disproportionately enriching the wealthiest in society and the expense of everyone else. Meanwhile, banks are shutting branches at a rapid rate and restricting their customers’ access to cash.
The Government is still committed to sell its stake in RBS over the next four years, but with Labour joining the SNP and Green Party in opposing an immediate sale, the pressure is mounting on Philip Hammond to change course.