Give public shares in bailed-out banks – Clegg
Deputy Prime Minister Nick Clegg backs proposals to give the public shares in part-nationalised banks Lloyds and RBS. Jon Snow asks should the government be more worried about the Greek debt crisis.
Mr Clegg said that he had urged the Treasury to adopt the scheme as he criticised the Conservatives for not being tough enough with the City.
In a direct echo of David Cameron’s complaint that the Liberal Democrats were holding him back on immigration and welfare, Mr Clegg said he would have been “much tougher”.
And, talking during a visit to Brazil, he revealed that he had written to Chancellor George Osborne pushing the creation of a “people’s banks” scheme.
“Psychologically it is immensely important that the British people feel they have not just been overlooked and ignored,” Mr Clegg said.
“Their money has been used to the tune of billions to keep the British banking system on a life-support machine and they have absolutely no say at all in what happens when normality is restored.
Financial maelstrom
"Hey! You at the back, stop yawning! Greek debt is not a bore. It has the potential to affect every man, woman and child in the UK," writes Jon Snow.
"Don't worry though – Nick Clegg, visiting Rio, says he wants each of us to be given shares in our nationalised banks – RBS and Lloyds…the very banks that are in the maelstrom of the UK’s exposure to Greek, Portuguese and Irish debt."
Read more in Jon Snow's blog: Wake up! Greek debt is not a bore
“I think, in a sense, as a society we are condemned to take an interest in our banking system.”
He added: “You are giving the Treasury an assurance that they will break even but you are not giving the Treasury the freedom to grab the windfall if there is one.
“This is something I have discussed a lot with (Liberal Democrat Business Secretary) Vince (Cable). Vince and I feel it is something that we want officials to look at.”
City blueprint
A blueprint developed by a City firm would see all 45 million people on the electoral roll handed most of the state’s shareholdings in Royal Bank of Scotland and Lloyds Banking Group.
The taxpayer owns 83 per cent of RBS and 41 per cent of Lloyds after the Government pumped in around £65.8 billion in 2008 at the height of the financial meltdown.
A “floor” price would be set below which the shares could not be sold to ensure the Treasury at least broke even – with individuals able to benefit from future growth.
That price is estimated at 74p for Lloyds and 51p for RBS shares. Given sharp falls in the share price, it could be some time before a profit could be realised.