LONDON - The British government still hopes to make a profit from its multi-billion-pound rescue of major British banks during the financial crisis, Prime Minister Gordon Brown said on Saturday.
Speaking at a campaign-style event before an election that must be held by June, Brown also made several arguments about why it would not be appropriate for Britain to swap its pound for the euro single currency at present.
Chancellor Alistair Darling also told The Scotsman newspaper in an interview published on Saturday that Britain was not considering adopting U.S. President Barack Obama's proposal for a levy on banks to repay taxpayers for bailouts.
What we are trying to do with the banks is to make sure that we do not pay anything -- and this is the same as Obama -- for the rescue of the banks, so we get all the money back, Brown said in answer to a question at a conference organized by the Fabian Society, a centre-left think-tank.
In the budget we changed our figures because we believe that we will get more back from the banks and probably make a profit ..., he said. Our aim is that no member of the public has to pay for the rescuing of the banks.
Huge bailouts during the financial crisis have left the British government holding 84 percent of Royal Bank of Scotland Group Plc and 43 percent of Lloyds Banking Group.
The bailouts have added to pressure on public finances caused by the recession. Markets want action to cut a deficit set to reach 178 billion pounds this year.
DOUBTS OVER EURO
Darling told the Scotsman that, rather than recover its money through a tax, the government would do so by selling the bank shares later.
On Friday the Conservatives, favourites to win the election, told the Financial Times they would back a global insurance levy on banks as long as G20 nations agreed to it .
Brown said a one-off tax on bankers' bonuses adopted by his government had caused us huge difficulties because people then say: 'Why shouldn't I move to another country?.' Britain would like other nations to follow suit in imposing the tax, he said.
Brown said that the problems of the Scottish-based banks, RBS and HBOS, during the financial crisis had weakened the case of the pro-independence Scottish National Party.
We would have had an Iceland situation if there was not the strength of the UK behind them, he said.
Asked if the conditions were right for Britain to join the euro, Brown joked: It's so long ago that we set the conditions that I've forgotten what the tests are.
Britain's Labour government has long said it supports the euro in principle but that five economic tests on convergence must be met before Britain would consider joining. We would have to have an alignment with the rest of the European economy, Brown said.
While he was in favour of the euro in principle, he said, I'd be very worried, as we've seen, that the British housing market is different from the European housing market, worried that the ... balance in our economy is different from the rest of Europe.
We've got an exchange rate that is flexible at the moment, he added.
I think at the moment it's unlikely that the conditions are there for us to actually move forward.
The pound has weakened sharply against the euro and the dollar during Britain's deep recession, making British goods more competitive.
(Editing by Patrick Graham)