© The Financial Times Ltd 2015 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
September 17, 2013 6:00 pm
George Osborne has hailed the start of the Lloyds reprivatisation as evidence that the British economy was “turning the corner” and that investors from all over the world were willing to invest in the UK.
His comments on Tuesday confirmed that the sale of taxpayer stakes in Lloyds and, eventually, RBS will be politically charged, with both the Tories and Labour trying to extract credit from the process.
For the chancellor, the sale of 6 per cent of Lloyds at a paper profit to the taxpayer – reducing the national debt by more than £500m – is an affirmation of his stewardship of the economy.
“This is another step in the long journey in putting right what went so badly wrong in the British economy,” he said. “It’s another step in repairing the banks; it’s another step in getting the money back for the taxpayer; and it’s another step in reducing our national debt.”
Mr Osborne may decide to reinforce the political appeal of bank sales by offering up Lloyds shares in a retail offering at a later stage, reminiscent of the Tell Sid Thatcherite privatisations in the 1980s.
However, Labour is also seeking to share the credit in the turnround of Lloyds, which it rescued in 2008. Alistair Darling, then chancellor, insisted the taxpayer would recover its investment in the rescued banks, in the face of much scepticism at the time.
Chris Leslie, shadow City minister, said Mr Darling’s success in saving the bank and keeping cash points open had been vindicated.
“Things are coming full circle,” he said. “It proves the state can play a rescue role in dire circumstances.” Like Mr Osborne, Labour says the receipts from the bank sales should be used to pay down national debt.
Mr Darling is heading the pro-union campaign in the Scottish referendum and has not ruled out a return to frontline Westminster politics after the poll next September.
Please don't cut articles from FT.com and redistribute by email or post to the web.
Sign up for email briefings to stay up to date on topics you are interested in