Selling bank shares off cheaply is nonsense

3.00.00pm GMT Sun 21st Feb 2010

Graham Oakes has described the Tory proposal to sell off bank shares cheaply as "total nonsense and evidence that the Tories haven't changed their spots and are not fit to run the country."

Shadow Chancellor George Osborne has announced that his "people's bank bonus" would reward the taxpayer for £850 billion the Government has spent on bailing out struggling banks. The policy is a return to Margaret Thatcher's privatisations of the 1980's, most notably the "Tell Sid" campaign used to promote the sale of British Gas shares.

The proposal is to sell bank shares at a discounted rate rather than attempting to get the full £850 billion invested in the banks back.

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.

'The nationalised and semi-nationalised banks should be reprivatised when the conditions are right to maximise tax payer return. Selling shares off at a discounted rate will not achieve this.

'These banks should be set the concrete objective of ensuring lending to sound small- and medium-sized businesses who are the drivers of our economic recovery.

'Actively encouraging people on very low incomes to invest in a volatile share market beggars belief and shows just how removed the Tories are from everyday reality.

'A young couple on low income is more concerned with putting food on the table than speculating on the stock market.

'If the Tories were actually committed to helping people on they would be trying to instill fairness into the tax system instead of coming up with this ill-conceived attempt to buy their vote.'

Graham Oakes added: "We need to be investing our limited resources in creating a fairer and more economically sustainable Britain. Giving billions of pounds to their friends in the City is total folly."