Strategy for a people's bank

After the financial meltdown in 2008, the Royal Bank of Scotland became 82 per cent owned by the British taxpayer.

And ever since they came into power, the Tories have been itching to sell it back to private interests, aided and abetted by their coalition partners in crime.

If we had an opposition with any courage whatsoever, rather than one still far too close for comfort to the financial institutions, it might oppose the reprivatisation of RBS and actually argue for its nationalisation. There is a strong case.

The obvious reason is that if the banking culture is to change in this country it has to start somewhere - and the easiest place is in an institution which is owned and controlled by the government on behalf of the people.

The ring-fencing which is mooted as being a precursor to the ending of casino-style banking would be guaranteed to take place, and at least the "socially useless" investment shenanigans would not be risking the day-to-day practices of the bank and its capital.

In addition the bonus culture, so prominent even in the banks which make little or no profit, could be brought under control.

This would lead to many of the obscenely paid leaving in a huff, though it's doubtful whether they will take their "expertise" abroad or even whether the bank will be affected by their departure.

Surely the reason for their leaving will be obvious to all - greed - while those who remained could well bathe in the reflected glory of being willing to attempt to turn the bank around for the good of the country.

They might not earn as much as the bosses of rival banks, but I doubt whether they'd suffer too much.

At the moment RBS seems willing enough to play a role in the funding for lending scheme, though not quite in the way it was expected.

It has done the first bit - borrowing at 0.25 per cent interest - but seem to have forgotten to do the second, a good enough cause, in anyone's book, to nationalise.

Since the introduction of the scheme, RBS's loan book has been reduced by £2.3 billion.

Everyone knows that small companies are desperate to borrow money, which would kick-start the economy, and that there are thousands of young people who cannot afford the huge deposits for overpriced homes, because so much rent is required from them by unscrupulous landlords.

RBS could not only be borrowing at very low interest rates, but actually passing the money on, in the form of cheap loans.

State ownership would require the shareholders to get compensation for their loss.

Well, at current prices, this would mean £8bn would be needed, but as the government can resort to "creating" money at the drop of a hat, another round of quantitative easing should do the trick.

In the past £375bn has gone to the banks, with nothing to show in return in terms of benefitting the economy.

This time, though, it could all go to the newly nationalised bank, which would not be in the business to maximise profits at all costs, but instead, be actually working as a stimulant to a flatlining economy.

With the newly acquired capital, nationalised RBS could be transformed into a people's bank, not only lending to small businesses, but to local councils as well to help regenerate their districts.

The councils with the best regeneration proposals could immediately receive cheap loans from our RBS (Responsible Banking Society) over a 10 to 20-year period, giving them a decent chance to provide new social housing, improve state schools and hospitals and generally reduce unemployment, with the same applying to the private house-building firms in need of a fresh impetus.

Moving accounts away from banks which fix Libor rates in their favour, which act as money-launderers for Mexican drug barons and which mis-sell insurance fraudulently to their customers and into a nationalised bank whose sole intention is to boost the economy can only be a sensible idea.

Let's face it, something radical has to happen if the banking culture of greed and profit at all costs is to change. As we own 82 per cent of RBS already, it has to make both political and economic sense.