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Nick Clegg backs giveaway of bank shares to public

Nick Clegg backs giveaway of bank shares to public

Category: Investments

Updated: 23/06/2011
First Published: 23/06/2011

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Nick Clegg has said that he backs the idea of giving the public shares in RBS and Lloyds, which were bailed out with taxpayers' money during the economic crisis.

The Deputy Prime Minister and leader of the Liberal Democrats made the comments on a state trip to Brazil, where he said that he felt it was important that Britons did not feel overlooked for their part in helping to support the banking system in 2008.

It is thought that almost £66 billion of public money was used to save RBS and Lloyds from going to the wall three years ago.

The two banks have effectively been part-nationalised, with the taxpayer owing an 83% stake in RBS and a 41% share of Lloyds.

And in a letter to Chancellor George Osborne, Nick Clegg has set out plans to make 46 million people shareholders in the banks.

"Psychologically, it is immensely important that the British people fell that they have not been overlooked or ignored," said Mr Clegg.

"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 when normality is restored."

The Deputy Prime Minister said that it was an idea that he had discussed at length with Business Secretary Vince Cable and one that he would like officials to consider.

He did, however, concede that there was 'a huge amount of detail still to be worked'.

While the end-game for the Government will be to sell the shares in the banks, it cannot do so until the price of its holdings are covered.

To break even on its investment in RBS, shares in the lender must reach 50.4p; yesterday, they ended the day at 36.65p.

On its shares in Lloyds, the Government has a break even price of 73p, a world away from the 47p that the bank's shares were deemed to be worth at the close of the FTSE 100 yesterday.

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