John Redwood is among those who support the idea of a bank shares giveaway, calling it an “excellent plan”. Others are rather more muted in their support, admitting that it is not the most straightforward way to return cash to the taxpayers who saved RBS and Lloyds at the height of the banking crisis.
Vince Cable admitted on the BBC this morning that the concept would be a “technically quite a demanding exercise” but “it can be solved”. He said that the handing out of shares was “not imminent by any means” and that it would take “several years” to complete. (Vince seems more focused on the issue of separating retail banking from more risky functions, ie the Sir John Vickers review).
This doesn’t quite tally with my understanding, which was that the Treasury wanted to begin the privatisation of both banks early next year.
Downing Street said only that Clegg’s suggestion is one of several under consideration, adding: “We need to make sure we get value for taxpayers.”
Ed Balls said the future of the nationalised banks should be decided on the “long-term best interests of the taxpayer” rather than the “short-term need to get headlines for Nick Clegg’s overseas trip“.
“The government needs to urgently explain what impact this proposal will have on the public finances, what the administration costs are estimated to be, how the scheme would work and what effect it would have on the balance sheets of the banks,” said the shadow chancellor.