Senior UK politician Vince Cable has written to the new chairman of the Royal Bank of Scotland Tom McKillop and Labour government Business Secretary Lord Mandelson, to demand that the loan given by the bank to a company owned by controversial Russian billionaire Oleg Deripaska should be repaid on time.
Lord Mandelson and Conservative party shadow chancellor George Osborne have been severely criticised recently as details of their private meetings in the summer with the Russian oligarch, who has been refused a visa by the US because of his alleged links with organised crime, became public.
Vince Cable, deputy leader of the opposition Liberal Democrat, said: "The Royal Bank of Scotland is now supported by the British taxpayer and its priority should be to allocate credit to British companies, particularly small firms, that are being squeezed by the credit crunch.
It would be absolutely wrong for a bank dependent on taxpayer funding to tie up large amounts of capital in international loans of this kind. "I trust we can rely on Lord Mandelson to put his weight behind this demand so that small businesses in Britain can benefit."
Dear Sir Tom,
Publicity has been given to the loan which I believe you have extended to Mr. Deripaska's company to assist with the acquisition of Norilsk Nickel. I am writing to seek assurances that you will insist on repayment on the due date so that funds will be available to British small and medium sized businesses and personal customers. There should be no question of a British bank, now financed by the UK taxpayer, extending this loan under any circumstances.
The initial loan was extended under very different circumstances from the present. Since the UK Government has now extended large scale funding to recapitalise RBS, your lending policy is under much greater scrutiny and I am sure that you will agree that it must reflect the wider UK national interest.
I am copying this letter to the Secretary of State for Business and Enterprise who will, I am sure, concur that the priority for UK bank lending must be the small business sector.
Vincent Cable MP