WHEN the UK Government bailed out Royal Bank of Scotland in 2008 it was rescuing the organisation from a situation that was largely of its own making.

Like many operating in the sector, RBS had taken on too much exposure to the overheated sub-prime mortgage market, leading to its near collapse when that bubble finally burst.

Now, after what RBS chief executive Ross McEwan called “a long decade”, the bank has finally got itself back into reasonable shape and is preparing to return cash to shareholders.

The problem is, while RBS is planning to make an interim payment of £241 million, its ability to continue to funnel funds to shareholders will be stymied if the Government fails to reach an agreement with the EU on Brexit.

As Mr McEwan said, the bank is facing “a more uncertain time with Brexit”, which the bank “would want to look at before making more major capital contributions”.

In other words, while RBS is ready and able to give back at least some of the money it received from the Government a decade ago, fears that it may have to stockpile cash for the foreseeable future could prevent it from doing so.

Alright so a few million pounds of dividends is small beer for an administration whose annual budget runs close to £1 trillion and, yes, the Government does plan to sell out of its position in RBS in the not too distant future.

But if it the Treasury is to lose out on dividend payments in the interim because of the Government’s Brexit plans then Westminster politicians will have only themselves to blame.