A review by the Competition and Markets Authority would scupper Conservative party plans to sell billions of pounds of Lloyds Banking Group shares.
Under Conservative plans, a £4bn retail offering would take place within 12 months of the election.
Lloyds shares would not be sold for less than the taxpayer’s break-even price of 73.6p, but would be offered at a discount rate of around 5 per cent to the prevailing market price at the time of the sale.
However, in an interview with Sky, Liberal Democrat Vince Cable claimed that proposals unveiled by prime minister David Cameron and chancellor George Osborne to offer discounted shares while delivering a profit to taxpayers would risk a CMA investigation. The CMA declined to comment on the claims, but said the banking markets findings was set to be published in the autumn.
Lewis Sturdy, analyst for London Capital Group, said: “The Chancellor is chasing the votes of retail investors as he promises the much sought after retail offering of Lloyds shares should he remain in Number 11 Downing Street after May 7th. Lloyds has said it would support the plan. One must assume that this has always been part of the government’s plan, holding back the news of such an offering until it could be used for potential political gain, as there have been a number of institutional sales already.”
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A Lloyds Banking Group spokesman said it was not for them to comment as it was a matter for government and UK Financial Investments, set up by the government to manage the Treasury’s shareholdings in banks.
