Five questions answered on Vince Cable’s call for a decision on RBS prosecutions

Why now?

Business Secretary Vince Cable has urged the Scottish legal authorities for a swift decision on whether to prosecute Royal Bank of Scotland’s (RBS) former directors. We answer five questions on Cable’s request.

Why is Vince Cable making this plea now?

Cable said he sent the letter to the Scottish authorities asking for the matter to be dealt with as soon as possible because he wanted to maintain public confidence, report the BBC.

What did Cable say exactly?

According to the BBC, Cable said to the Advocate General for Scotland, Lord Wallace, a fellow Liberal Democrat, that he was looking for an update on the situation but was not trying to influence it in anyway. He said

"There is, as you will know, considerable public concern about the actions of the directors of RBS prior to its insolvency.

"Following the release of the FSA's report into the failure of RBS I sought legal advice on what if any enforcement action was appropriate and was advised that the Crown Office and Procurator Fiscal Service (COPFS) should consider a possible prosecution.

"Given that this matter was referred to them in January 2012, I am very keen for a decision to be reached as quickly as possible in order to maintain public confidence in the efficiency of the decision-making process."

What do the prosecution charges relate to?

In 2011, a report by banking regulator the Financial Services Authority (FSA) said RBS was nearly foiled in 2008 – when it required a £45.5bn taxpayer-funded bailout – because of ‘multiple poor decisions’ and a £50bn ‘gamble’ on buying Dutch bank ABN Amro.

It also stated that RBS Chief Executive Fred Goodwin’s management style was highlighted as a potential risk as early as 2003.

A short while afterwards, the Crown Office in Scotland said an investigation had been under way for some time because of "the degree of public concern about recently reported issues in the banking sector".

Is this the only legal action against those involved in bringing RBS to its knees?

No. Earlier this month more than 12,000 private shareholders and 100 institutional investors raised a class action against the bank relating to a £12bn rights issue by RBS in 2008 after its acquisition of ABN Amro.

Who are those involved in this latest legal action?

Goodwin is among those named in the action, as well as ex-chairman Sir Tom McKillop and senior figures Johnny Cameron and Guy Whittaker.

Photograph: Getty Images

Heidi Vella is a features writer for Nridigital.com

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What type of Brexit did we vote for? 150,000 Conservative members will decide

As Michael Gove launches his leadership bid, what Leave looks like will be decided by Conservative activists.

Why did 17 million people vote to the leave the European Union, and what did they want? That’s the question that will shape the direction of British politics and economics for the next half-century, perhaps longer.

Vote Leave triumphed in part because they fought a campaign that combined ruthless precision about what the European Union would do – the illusory £350m a week that could be clawed back with a Brexit vote, the imagined 75 million Turks who would rock up to Britain in the days after a Remain vote – with calculated ambiguity about what exit would look like.

Now that ambiguity will be clarified – by just 150,000 people.

 That’s part of why the initial Brexit losses on the stock market have been clawed back – there is still some expectation that we may end up with a more diluted version of a Leave vote than the version offered by Vote Leave. Within the Treasury, the expectation is that the initial “Brexit shock” has been pushed back until the last quarter of the year, when the election of a new Conservative leader will give markets an idea of what to expect.  

Michael Gove, who kicked off his surprise bid today, is running as the “full-fat” version offered by Vote Leave: exit from not just the European Union but from the single market, a cash bounty for Britain’s public services, more investment in science and education. Make Britain great again!

Although my reading of the Conservative parliamentary party is that Gove’s chances of getting to the top two are receding, with Andrea Leadsom the likely beneficiary. She, too, will offer something close to the unadulterated version of exit that Gove is running on. That is the version that is making officials in Whitehall and the Bank of England most nervous, as they expect it means exit on World Trade Organisation terms, followed by lengthy and severe recession.

Elsewhere, both Stephen Crabb and Theresa May, who supported a Remain vote, have kicked off their campaigns with a promise that “Brexit means Brexit” in the words of May, while Crabb has conceded that, in his view, the Leave vote means that Britain will have to take more control of its borders as part of any exit deal. May has made retaining Britain’s single market access a priority, Crabb has not.

On the Labour side, John McDonnell has set out his red lines in a Brexit negotiation, and again remaining in the single market is a red line, alongside access to the European Investment Bank, and the maintenance of “social Europe”. But he, too, has stated that Brexit means the “end of free movement”.

My reading – and indeed the reading within McDonnell’s circle – is that it is the loyalists who are likely to emerge victorious in Labour’s power struggle, although it could yet be under a different leader. (Serious figures in that camp are thinking about whether Clive Lewis might be the solution to the party’s woes.) Even if they don’t, the rebels’ alternate is likely either to be drawn from the party’s Brownite tendency or to have that faction acting as its guarantors, making an end to free movement a near-certainty on the Labour side.

Why does that matter? Well, the emerging consensus on Whitehall is that, provided you were willing to sacrifice the bulk of Britain’s financial services to Frankfurt and Paris, there is a deal to be struck in which Britain remains subject to only three of the four freedoms – free movement of goods, services, capital and people – but retains access to the single market. 

That means that what Brexit actually looks like remains a matter of conjecture, a subject of considerable consternation for British officials. For staff at the Bank of England,  who have to make a judgement call in their August inflation report as to what the impact of an out vote will be. The Office of Budget Responsibility expects that it will be heavily led by the Bank. Britain's short-term economic future will be driven not by elected politicians but by polls of the Conservative membership. A tense few months await. 

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.