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David Prosser: RBS does its job at last

Wednesday 20 January 2010 01:00 GMT
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Outlook Disloyalty, thy name is Royal Bank of Scotland – that's how some Labour MPs (and the Liberal Democrats' Vince Cable) are characterising the bank's participation in the syndicate lending Kraft the money it needs to secure Cadbury. British taxpayers save your skin and you repay us by helping Kraft march off with one of our national treasures, they complain.

The problem is that many of those complaining loudly about RBS's involvement in this deal are also highly critical of the strain that bailing out the banks has put on Britain's finances. And if we want that strain to be eased any time soon, we need to give the bank the freedom to make a bit of money from time to time.

Though RBS is 84 per cent owned by taxpayers, it is not a State bank that makes decisions for political reasons, or even with Britain's national interest in mind. UK Financial Investments, the body that manages the taxpayers' stakes in the banks, has explicitly been instructed to do so on a commercial basis.

Let's hope RBS is charging Kraft lots of expensive interest on this debt – and that the US company will ask the bank to lend it even more to finance its higher offer. We taxpayers might get our money back sooner than expected.

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