Tories unveil 'people's bonus' shares plan for bailed out banks

Monday 22nd February 2010

Shadow chancellor George Osborne has drafted a "people's bonus" plan which offers the public the opportunity to buy cheaper shares in state-owned banks.

In an interview with the Sunday Times, Mr Osborne said that the Conservative party wanted to introduce the measure to compensate taxpayers for the £850 billion they paid to bail out failing banks during the financial crisis and recession, including Northern Rock, Royal Bank of Scotland (RBS) and HBOS.

He explained: "The bankers have had their bonuses. We want a people's bank bonus for the people's money that was put into these organisations."

Mr Osborne said he would only put his proposed plan into action when banks were regulated to the extent that they could not take the risks they have been able to take in recent times.

Meanwhile, the Labour party labelled the plan "an expensive political gimmick" whilst the Liberal Democrats defined it as "electioneering at its most cynical".

Lib Dem Treasury spokesman Vince Cable continued his criticism of the proposal: "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."

According to the Sunday Times, the Tory plan would allow the public to invest in shares costing between a few hundred and a few thousand pounds, with further discounts for young people and those on low incomes.

RBS and Lloyds shares are currently worth around a third of the amounts that the government paid.

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