David Prosser: Let RBS lend to Kraft

Outlook Whatever the rights and wrongs of Kraft's bid for Cadbury, it would be crazy to heed the calls of Midlands MPs – and others – who want the Government to stop Royal Bank of Scotland helping to fund the takeover. RBS is one of a syndicate of lenders offering finance to the US company as it tries to buy up its rival, and those who want to keep Cadbury British say it is inappropriate for a bank that is now 84 per cent owned by the taxpayer to play such a role.

Lord Mandelson, Business Secretary, said yesterday that the Government did not have the power to stop RBS working with Kraft. But even if it did, an overt political intervention of this kind would be hugely dangerous. Never mind the signal it would send out about a British embrace of protectionism, it would soon be open season on every lending decision that RBS makes. Do we really want a situation where every time the bank decides whether or not to lend money to someone, a host of interested parties then appeal to the Government to interfere?

Anyway, stopping RBS from being involved in this deal would be pointless. If the bank pulled out of the syndicate, Kraft would find a replacement – its campaign would be temporarily inconvenienced but certainly not scuppered.