Cameron backs plan to give RBS shares to public (The Times)

Sam Coates and Michael Savage report in The Times that David Cameron is considering a share giveaway reprivatisation of RBS, as proposed by the CPS in “Give Us Our Fair Shares“. 

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“David Cameron has demanded that plans to reprivatise Royal Bank of Scotland begin “as soon as possible”, backing radical plans to give members of the public shares.

The Prime Minister endorsed the mass transfer of shares to the public for the first time, suggesting he was open to ideas that would have “people owning this bank in a genuine way”.

Plans to give shares to the public were scorned by senior Tories when suggested by Nick Clegg in 2011.

The remarks are significant because they suggest that the Government has accepted at the highest level that it is likely to have to sell its 81 per cent stake at a loss. The Government must sell the shares for 407p or above to break even on its balance sheet. The bank’s shares closed at 307p yesterday, and a sale at this price would mean a significant increase in the structural deficit.

The remarks also suggest that the Government is preparing to ignore demands from the Parliamentary Commission on Banking Standards, which is likely to call next month for RBS to be split into a “good” bank and a “bad” bank. The demand that Whitehall accelerate the share sale is likely to fuel rumours that George Osborne may make an announcement in his Mansion House speech next month.

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Date Added: Wednesday 22nd May 2013