Darling agrees to break the banks

By politics.co.uk staff

Publicly-owned banks will be broken down and sold to new owners, the chancellor is expected to announce this week.

The face of high street banking in Britain will never be the same again if the plan goes ahead, with Lloyds Banking Group and RBS being stripped down and sold on, with an expected formation of three new high street brands.

The plan is intended to create more competition in the retail banking sector. The contracts are expected to go to new players, with Virgin and Tesco expected to make a move. Foreign companies are also likely to make bids.

Santander will probably be allowed to bid for RBS’ business banking group, despite already owning just under eight per cent of Britain’s small business lending market.

Northern Rock will also be sold off.

While banks are expected to make announcements of their own, Downing Street said Alistair Darling was likely to make a statement to the Commons at some stage this week.

“It is possible there may be more information about… implications for competition and the retail banking business in the UK,” the prime minister’s spokesman said.