Jimmy Haddow, Socialist Party Scotland
Starmer’s Labour government has sold the last of its interest in NatWest – formerly Royal Bank of Scotland (RBS) – returning the bank fully to private hands.
This after 17 years and over £46 billion in a publicly funded bailout following the 2007-08 banking and financial crisis.
Actually, the UK government has only received £35 billion back from the bank’s bosses, which means the capitalists got it on the cheap by saving themselves £10.5 billion.
NatWest made £1.8 billion in profit in the first three months of 2025. A classic case of nationalising the losses and privatising the profits.
In total, the then Labour government spent £137 billion to nationalise or part-nationalise the banks. In return, the working class paid the price with a decade and a half of austerity as successive governments took an axe to public services.
Councils, including Birmingham City Council which is at war with its own bin workers, are treated differently from the banks. Local government is paying around £3.5 billion every year in debt repayments – 15% of their budgets.
If billions can be written off for a major bank, why can’t councils have their debt written off?
When it was rescued in 2008, RBS could be counted as the biggest in the world. It had more than £1.63 trillion on its balance sheet.
Scotland’s then first minister, Alex Salmond, encouraged the chief executive, Sir Fred Goodwin, to take over the Dutch bank ABN Amro in 2007; but it turned out to be riddled with toxic, mortgage-backed securities that contributed to RBS’s collapse.
RBS was within hours of having to shut down, so the Gordon Brown-led Labour government bailed it out in October 2008.
Was there an alternative, given the imminent collapse of the banking system?
A genuine workers’ government would not bail out bankrupt private banks and companies and then hand them back to the private sector to continue ripping us off.
It would fully take the banks into public ownership and run them under democratic working-class control and management, with compensation to be paid only on the basis of proven need. This would have allowed workers to access affordable loans and mortgages.
If public ownership of the banks was linked to the nationalisation of the top 150 companies that control the economy, a socialist plan of production for the benefit of the 99% would be entirely possible.
