There is a touch of déjà-vu about the plans: but they’re unlike the share sell-offs of the Thatcher era, when people were offered the chance to buy a stake in the likes of British Gas, BP and BT. This time, though, the shares would be given away for free – giving everyone on the National Insurance register (or the electoral roll, they haven’t decided yet) 1,450 shares in RBS (83% owned by the Government) and 450 shares in Lloyds (41% owned by the Government). At today’s prices, that would make the bundle worth £771. (A long weekend with the family in a nice cottage in Cornwall, at the very least). There is a catch, though: share prices currently stand at 47p for Lloyds, and 39p for RBS. But for the Government, the break-even price is 74p and 51p respectively, so no-one would be able to make a profit until then.
Clegg’s point is that the general public has lost trust in the financial system, and that people should be given a say in what happens when normality is restored to the banks that had ‘billions and billions and billions’ of pounds of taxpayers’ cash ploughed into. ‘Psychologically, it is immensely important that the British public feel they have not been overlooked,’ he added.
Noble, indeed – but are hurt feelings enough to persuade the Treasury to forfeit cash it desperately needs? Probably not. It has previously said a shares giveaway is an ‘interesting contribution to the debate’ – Treasury speak for ‘not on your nelly, if we have anything to do with it’. And there’s always the argument that this sort of thing is rarely beneficial to taxpayer, will cost a fortune to administer and tends to end up being rather gimmicky. Just look at the Thatcher shares sell-off: the majority were sold on within two years – creating little long-term benefit for their original recipients.
Perhaps the biggest loser under the proposals would be the City, which would forfeit the £2bn-odd it would have got in fees for advising on the privatisation of both banks. Although, along with the idea of the chance to vote on Lloyds CEO Antonio Horta-Os?rio’s remuneration, that’s probably enough to justify the proposals outright from some taxpayers’ points of view…