Election 2015: Cameron wants to sell Lloyds shares to public

Up to £4bn worth of Lloyds Bank shares will be offered to small investors at below-market prices if the Conservatives win the election, David Cameron has confirmed to the BBC.

The offer would be part of the £9bn sale of shares in the bailed-out bank announced in the Budget in March.

Mr Cameron said it would “help us recover billions more to pay down the national debt”.

Labour said the Tories had announced the plans at least seven times before.

Shadow Chancellor Ed Balls said he would be “happy to have a look at” the plan as long as it was not which would lead to big institutional investors “making a killing”.

The Liberal Democrats said the idea had been looked at by the coalition government but decided against because it was not clear the money could be recouped for the taxpayer.

In other election-related news:

• Labour says the number of NHS nurses in England is set to fall by almost 2,000 over the next four years, according to government projections
• Labour leader Ed Miliband tells the Observer he wants to reach out to undecided or disaffected voters of all inclinations, saying he is positioned in the “mainstream of politics”
• Lib Dem Business Secretary Vince Cable tells the BBC’s Andrew Marr Show it would be “difficult to work” with Labour or the Tories but the party is willing to work with other parties “in the national interest”
• SNP leader Nicola Sturgeon tells the same programme she will not do a deal with Mr Cameron “under any circumstances” and insists they would be a “constructive force”
• Mr Cameron tells Marr he’s not planning any deal with UKIP, who “will be lucky to get one seat” anyway, adding: “I’m not going to talk about anything other than winning an overall majority”
• UKIP leader Nigel Farage says he believes there will be “a complete stitch-up” on a referendum over Europe if Mr Cameron wins a majority
• The latest opinion polls continue to offer conflicting views – Opinium for The Observer has Tories – 36%, Labour – 32%, Ukip – 13%, Lib Dems – 8%, and Greens -5%
• In contrast, YouGov for The Sunday Times has Labour – 36%, Conservatives – 33%, Ukip – 13%, Lib Dems – 8% and Greens – 5%
• The deadline to register to vote in the election is at midnight on Monday. Find out how to register

Under Mr Cameron’s plans, buyers who keep their Lloyds shares for a year will be rewarded with a loyalty bonus.

It will include one additional free share for every 10 shares that they still hold.

With Lloyds shares closing at 78.75p on Friday, those offered to individual investors will be sold for more than the 73.6p a share paid by the previous Labour government when it bailed out the bank following the financial crash of 2008.

The prime minister said: “We haven’t announced it before. We’ve said we want to see Lloyds back in the private sector but we haven’t said there’ll be a retail offer so they can own shares in healthy, successful British banks.

“The crucial point is it’s more of clearing up the mess that Labour left us. The taxpayer put £20bn into these banks and I want to get the money back.

“We’ve already recovered billions and this will help us to recover billions more to pay down the national debt.

“But I think that at the same time that having people in our country being able to own shares in healthy, successful British banks is the sort of country we should be building.”

Analysis

By Joe Lynam, BBC business correspondent

In Feb 2007, 19 months before Lloyds TSB merged with HBOS to form Lloyds Banking group, shares stood at 600p. Today, 8 years, 2 bailouts and one financial crisis later Lloyds shares stand at 79p. At this price the Government would be selling at a profit. But not a huge one. Lloyds shares are booked at a buy-in price of 61p in the Government’s national accounts but because there were 2 bailouts (2008 and 2009) the more realistic figure is anything above 73p a share.

So if a 5% discount is applied to the current share price it would mean a meagre 2p a share profit for taxpayers. Having said that the prospects for Lloyds are good. They’re a profitable, low cost bank focusing exclusively on retail and business customers in Britain. They’ve the biggest share of the mortgage market and a huge physical presence on the UK High Street.

They’ll also soon be paying dividends to shareholders, which more than can be said for fellow bailed-out bank RBS.

BBC