Osborne launches 'people's bank bonus' plan
Updated on 21 February 2010
Shadow Chancellor George Osborne announces Conservative plans to sell shares in state owned banks at a discount under a scheme that would encourage people on low incomes to invest.
Mr Osborne said it would reward taxpayers for the billions of pounds in government money ploughed into bailing out the banks. But critics dismissed it as an "expensive political gimmick" primarily designed to "buy votes".
The government nationalised Northern Rock and took stakes in the Royal Bank of Scotland (RBS) and Lloyds Banking Group in return for bailing them out during the financial crisis. The Conservative plan involves selling shares in Lloyds and RBS.
Tory officials compared the scheme with the 1980s "Tell Sid" campaign aimed at encouraging people to buy shares in British Gas which attracted more than two million first time shareholders.
They warned that the sale could only happen at a time when the government stood to make a profit - which experts recently suggested could be as long as five years away - and that institutional sales would also form part of the package given the sums involved.
But Chief Secretary to the Treasury Liam Byrne dismissed the plan, saying: "The Tories' deficit reduction plan is now a certified farce.
"When it comes to the shares in the banks the public expect us to focus on getting their money back. That means selling them at a time and way that maximises their value, not an irresponsible and expensive political gimmick.
"The Tories can't pretend that they care about helping the poorest save when they'd take the Child Trust Fund from families on modest and medium incomes."
Liberal Democrat economics spokesman Vince Cable said: "Dangling this prospect, when UKFI has said it will take at least five years before the likes of RBS are back in private hands, is Tory electioneering at its most cynical.
"They have no understanding of the economy they are aspiring to run."
