‘People are starting to worry’ about a Labour government under Jeremy Corbyn, says RBS chairman

The prospect of Jeremy Corbyn leading a Labour government is a concern to UK banks, according to Royal Bank of Scotland (RBS) chairman, Howard Davies. 

"People are starting to worry," Davies said in an interview with Bloomberg, about what could happen under a Corbyn regime should a general election be called. 

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RBS is still 62 per cent owned by the state following its nationalisation in the wake of the 2008 financial crisis and Labour has repeatedly opposed efforts to reduce that stake. 

In February the opposition party said it would halt the sale of further shares in RBS that the Conservative Party is currently planning, should it gain power. 

“Corbyn does have a particular issue about RBS — they’ve said at the moment that they won’t be buying RBS back, but they wouldn’t be selling any more either,” he said. “Whether that’s a stable position, we’ll see.”

Beyond RBS, the implications of a Labour government on the wider banking industry are still unknown, Davies said.

“There’s not that much that’s specific about banks. Employee ownership issues would apply to all companies. In some ways, if you had a very expansionist fiscal policy, that would be quite good for the banks.”

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And while banks await the details of future policy, the immediately pressing issue of Brexit continues to loom large in the background.

“Everybody’s kind of holding their breath – there’s no sense of panic,” said Davies. “But at the moment they just cannot see the way out.”