The great sleeper issue in British politics at the moment is what to do with the state owned bank shares. The money that could be generated by a sale of these bank shares is massive. The state’s stake in RBS is bigger than all the privatizations of the 1980s combined.
Nick Clegg’s proposal (£) that everyone in the country be given shares in the banks is one option. But I suspect that would overly depress the value of the shares and would reduce the amount of money that the government would have in its pre-election war-chest.
A more likely option is still a scheme where these shares are sold at heavily discounted rates to the public. I understand that this remains George Osborne’s favoured solution.
It is easy to see the appeal of this scheme to the Chancellor. It would still generate revenue for the exchequer and aid with any pre-election Budget; and it would expand share ownership something, which would benefit the Tories electorally and create a constituency invested in the success of the banks.