Osborne postpones full Lloyds privatisation

28 Jan 16

George Osborne has announced a delay to completing the full sale of the government’s stake in Lloyds Banking Group due to “turbulence” in the global financial markets.

The chancellor set out plans to complete the privatisation of the government’s stake in the bank, which was bailed out in the financial crisis, in a speech in December.

He had approved the extension of a trading plan to sell down the taxpayer stake, which has been reduced to around 9% from a peak of around 40% during the financial crisis of 2008.

The plan outlined in December was to reduce the holding to a level where the government could fully privatise the bank through a share offer to the general public this year. More details were expected in the spring, but Osborne today said that the sell-off would be delayed due to uncertain economic conditions.

“I want to create a share owning democracy. It's also my responsibility to ensure economic responsibility so with these turbulent financial markets now is not the right time to have that sale,” he stated. “We will sell Lloyds to the British people but we will do so when the time is right.”

Responding to the announcement, shadow Treasury minister Richard Burgon said Lloyds share price has been trading below the Government’s breakeven price since the start of the year.

“When it comes to selling the Lloyds shares, Labour is clear that we need best value for the taxpayer. But people will take George Osborne’s claims with a pinch of salt, given the Tories’ record on Royal Mail and RBS.”

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