Last month, George Osborne used the final budget of this parliament to announce the sell off of the government’s remaining £9bn stake in Lloyds; in a speech on Saturday, David Cameron confirmed that up to £4bn of the shares will be sold to private investors. Investors purchasing up to £1,000 worth of shares will be given a discount of at least 5 per cent on the market price at time of sale.

Buyers must purchase 250 shares at a minimum, and there will be a maximum spend of £10,000. Buyers who hold the shares for a year will be rewarded with a “loyalty bonus” of one additional free share for every 10 shares they hold.

Shares will be sold above the price of 73.6p a share paid by Labour in 2009, when it bailed out the bank. To date, £9bn has been raised from the sale of Lloyds shares, and the government’s stake in the bank has fallen from 43 to 22 per cent. Proceeds from the sale of the shares will be used to pay down the UK national debt.

“The £20bn bailout of Lloyds bank became a symbol of the crisis that engulfed the British economy under Labour,” Cameron said. “After the public bailed it out, people feared they wouldn’t see their money returned. Today’s announcement marks another step in the long journey we have been making repairing our banks, turning our economy around and reducing our national debt, only made possible by our long-term economic plan.”

“That’s why it is so important that we don’t put all that progress at risk, but instead build on what we’ve done so we can deliver a brighter, more secure future for our country.”

Business Secretary Vince Cable welcomed the policy in principle, but believed it was possible that the plan would amount to “the taxpayer giving a subsidy to a small number of private investors.”