23rd June 2011
The idea that the public should be given shares in part-nationalised banks such as RBS and Lloyds was mooted in March this year.
Now Nick Clegg has added his support to the idea. On the BBC News website he is reported as saying "it was important British people were not overlooked after their money was used to keep the banking system alive".
Mr Clegg, who was on a trip to Brazil with other cabinet ministers said: "Psychologically it is immensely important that the British people feel they have not just been overlooked and ignored.
"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."
The idea was first suggested in March by City firm Portman Capital with the support of the Lib Dems' Treasury Parliamentary Committee.
On The Guardian website Clegg is reported as setting out his plan in a letter to the chancellor, George Osborne.
The plan, he says, would create 46 million shareholders and allow a form of collective ownership of the banks.
However the Guardian points out that Conservatives are likely to argue that denationalisation of the banks, brought into semi-public ownership in the years following the banking crash in 2007, should either be used to reduce the deficit, provide tax breaks or even restore public spending.
The Daily Mail outlines some of the finer detail of Clegg's plan.
"The taxpayer owns 84 per cent of RBS and 43 per cent of Lloyds after pumping £67billion into the lenders during the banking crisis of 2008.
As of yesterday's closing prices, the value of the taxpayer's investment was down by around £11.9billion. Lloyds closed at 47p a share and RBS at 38.65p.
Under the plan, each UK citizen could receive about 1,450 shares in RBS and 440 in Lloyds – worth up to £775 at current market prices – which would be deposited in individual trading accounts."
On the BBC comment boards Julie Sandground argues that existing shareholders in banks should be considered first. "Have the government looked at reimbursing the shares that were "taken" from shareholders of both RBS, and other failing banks. Should the shares not be given back to the original shareholders in the first instance? "This would at least go some way to compensating the original shareholders for the losses they made.
On the Daily Mail readers debate exactly who should get the shares if the plan goes ahead.
Paul of Southport writes: "If everyone in Britain got a "payout" that would include all those on benefits they didnt pay anything . Stop messing about … just wait and sell the shares on the open market and put it back in the pot they took it out of. That way the taxpaper will get their money back at a profit. See AIG USA. There is no rush for this although the Government would like to get the money before the next election of course to show how good they were. and balance the books. We should be looking at 100% return."
To receive our free weekly email sign up here.