Shares of the partially tax-payer owned RBS and Lloyds Banking Group should be handed out to the British public at no initial cost, recommends right-wing think tank Policy Exchange.

The think tank proposes that a small amount of the shares be sold to institutions and the rest distributed amongst registered voters in the UK (roughly 48 million people). The shares would only have to be paid for when they were sold. If these recommendations were acted upon, it would be Britain’s biggest ever privatisation.

‘We urge the Chancellor to take this method and apply it to both RBS and Lloyds giving the taxpayer an opportunity to profit from both and get the banks back into the private sector, where they belong,’ Policy Exchange said in the report.

According to the proposals, if after ten years the share price hasn’t risen above the floor price, the shares would be returned to the government, however, if the share price rises, the public would be able to sell and pocket the difference.

The report insists that the proposal would create a ‘whole new generation of shareholders’, however there are fears that this difficult to implement plan would result in people immediately selling their shares, destabilising the banks the plan intends to bolster.

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