ONS classifies RBS as ‘public sector’
By Ian Dunt
The latest Office of National Statistics (ONS) has classified RBS and Lloyds Banking Groups as ‘public sector organisations’.
The classification forms part of the office’s latest public finance figures, which showed public finances to be in a worse shape than expected.
“The ONS has confirmed what we already knew. The government has in effect nationalised RBS and has a substantial stake in Lloyds,” said Vince Cable, Liberal Democrat Treasury spokesman.
“However, it’s extraordinary that statistical conventions mean the public accounts will only include the liabilities of the banks, and not their assets.
“Ministers must now accept the reality that they effectively own two large banks and use them to ensure the flow of much needed credit into the economy.”
Net borrowing for the sector stood at -£3.3 billion, compared with a consensus forecast of -£7 billion. This means the state in effect repaid its debt – as January often marks major income and corporation tax receipts.
However, it is the lowest January repayment since 1995.
Shadow chief secretary to the Treasury Philip Hammond said: “This is just the beginning of Gordon Brown’s debt crisis.
“Even on his own figures our national debt is set to double to more than one trillion pounds.
“Once the liabilities of the bailed out banks are included, our true national debt is now significantly larger than our national income, adding to the risks facing the economy and the burden on future generations.”
The figures show that public sector net debt has risen to 47.8 per cent of GDP, or £703.4 billion – almost £100 billion more than a year ago.
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