Vince Cable calls for RBS break-up

Business secretary Vince Cable has told the government that state-owned Royal Bank of Scotland (RBS) should be split up, a letter seen by the BBC shows.

Vince Cable
Vince Cable

The letter, sent by Cable to prime minister David Cameron and deputy prime minister Nick Clegg, recommends that RBS is turned into a British Business Bank that can support the UK’s other companies.

“My suggestion is that we recognise that RBS will not return to the market in its current shape and uses 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,” the business secretary writes.

Cable says the institution could also be used to support the government’s other industrial objectives, such as boosting exports and helping sectors considered to be of “strategic importance”.

In addition, the letter accuses the government of lacking a “clear and confident message about how we will earn our living in the future”, failing to establish a “compelling vision of where the country is heading beyond sorting out the fiscal mess” and missing “valuable opportunities” for growth.