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Taxpayers still have a significant stake in the bank of more than 30 per cent, but Osborne added that the £3.21 billion deal is an "important step" in his spending plans.
The Government has sold a six per cent stake in Lloyds Banking Group for £3.21 billion at a share price of 75p.
This morning the British taxpayer will learn what investors are prepared to pay for Lloyds banking group.
The figure should be around £3.3bn.
The Chancellor George Osborne has said the sell-off of Lloyds Banking Group "is another step of repairing what went so badly wrong in the British economy."
He added: 'I've been absolutely determined to get that money back for taxpayers and pay down debt, that is what we've started to do today."
Labour has called on the Government to ensure taxpayers get their money back when they sell off six per cent of Lloyds Banking Group.
Chris Leslie, Labour's shadow financial secretary to the Treasury, said:
“It’s vital that taxpayers get their money back and this must be the prime consideration in the sale of the government’s stakes in the banks.
"And as Labour has consistently said any profits from the sale should be used to repay the national debt."
The Chief Executive of Lloyds Banking Group has hailed the Government's decision to sell six per cent of its share in the company, insisting it reflects the "hard work" put in to make the bank profitable and safe again.
Antonio Horta-Osorio said: “I am pleased that the Government has been able to begin the process of selling its stake, and give taxpayers the opportunity to get their money back.
"I believe this reflects the hard work undertaken over the last two years to make Lloyds a safe and profitable bank that is focused on supporting the UK economy.”
Latest ITV News reports
Chancellor tells ITV News the sale of £3.21bn worth of Lloyds shares will not necessarily trickle down to struggling households.
The Treasury has started the process of one of the most anticipated business deals in years, but will the taxpayer get their money back?