Lloyds, RBS and Northern Rock will be broken up and sold to new owners in the banking sector, Chancellor Alistair Darling confirmed on Sunday.
The BBC reported that there could be three new banks on Britain?s high streets in the next three or four years. Mr Darling said that he would only sell when, ?the time is right,? to ensure the best deal for British taxpayers.
The idea is to sell to new entrants in the financial market to boost competition in the savings and mortgage markets. Nevertheless, speculation suggests that interested parties may include Tesco and Virgin.
Mr Darling said that having just a few competitors in the market was unacceptable and that he wanted to encourage competition and choice.
The chancellor said that Northern Rock would be split into two parts by the end of this year, with a sell-off anticipated in the next three to four years. The part sold off would be that which dealt with savings, new loans and some existing mortgages.
The same break-up will also apply to the other government-owned banks, RBS and Lloyds, in which it holds a 70 per cent and 43 per cent stake respectively.
Treasury spokesman for the Lib Dems, Vince Cable, said that increased competition would be welcome, but there was no urgency to sell. ?We need to be careful that when these split-ups occur, the prime cuts are not offered to private investors and the scraps left to taxpayers,? Mr Cable said.
MP John McFall of the Treasury select committee was concerned that assets should only be sold for at least their market value.
?It is important to ensure that we get taxpayer return for this bail-out. I’m relaxed about the timescale. I do not want to sell off bank assets at a cheap price, I don’t want a fire sale,? he said.
