High-street banks slammed for offering 'mean commercial terms' to Big Society Bank

05 May 2011 News

Sir Sandy Crombie, a non-executive director for the Royal Bank of Scotland Group, was forced to defend the plans by four high-street banks to give the Big Society Bank £200m on commercial terms, after MPs criticised it as “mean and churlish” compared to what taxpayers paid to bail out the banks in 2009.

Sir Sandy Crombie, a non-executive director for the Royal Bank of Scotland (RBS) Group, was forced to defend the plans by four high-street banks to give the Big Society Bank £200m on commercial terms, after MPs criticised it as “mean and churlish” compared to what taxpayers paid to bail out the banks in 2009.

Speaking at a Public Administration Select Committee hearing this week, where Sir Sandy gave evidence, MP Kelvin Hopkins complained that four high-street banks could give £200m “without blinking”:

“It is so small – to be mean and want commercial terms on the amount seems churlish compared to what taxpayers paid to bail out banks.”

Sir Sandy replied that people should not assume that the banks would be mean.

Earlier in the meeting Sir Sandy admitted that part of the agreement would see banks seeking commercial terms, but he said people should not get “hung up on it”:

“There is still a vagueness around the term,” he said. “The banks are currently waiting on the business plan and structure of the Big Society Bank to decide as to what will constitute a return.”

Conservative MP Charlie Elphicke questioned whether the banks would “whack up the rates” if the Big Society Bank did not have a good business plan.

Sir Sandy said the Big Society Bank would have to show it would be self-sustaining to get an element of return, but said there was still “plenty of room for discussion about returns”.