Govt facing legal action over RBS bailout
Govt facing legal action over RBS bailout
Wednesday 3rd February 2010
The government is facing legal action over its decision to inject yet more taxpayers' money into the state-owned Royal Bank of Scotland.A number of pressure groups have claimed the decision to provide a further £25 billion to the bank in November was 'unlawful' and will today serve the Treasury with their application to the high court challenging the decision.
The World Development Movement, Platform and People & Planet groups point to apparent Treasury guidance which they say declares when determining if and how public money is spent, an assessment of the likely impact the proposed spending will have on human rights and the environment has to be completed before the money can be provided.
The groups claim no proper assessment was undertaken and that the Treasury "failed to adequately calculate the negative impact of allowing RBS to invest taxpayers' money into harmful projects".
On Tuesday it was revealed RBS had written to shareholders outlining its bonus proposals that will see senior bankers able to convert payments, which are set to be awarded in shares or subordinated debt, into cash as early as June.
The bank, which is 84 per cent owned by the taxpayer, has attracted massive criticism over its decision to pay out bonuses, with folk singer Billy Bragg launching a campaign against the decision and refusing to pay his taxes in protest at what he has described as "excessive" payments.
The same pressure groups challenging the latest Treasury payout attempted to take the government to the high court last year.
The Treasury has argued a failure not to make the RBS payment would be harmful to the stability of the bank.
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