By Dark Politricks
The news last week was full of the idea proposed by Nick Clegg and some Tories including John Redwood thatevery UK citizen on the electoral roll should be given £1,000 worth of shares in the bailed out banks Lloyds and RBS.
The UK government currently owns 83% of RBS and 41% of Lloyds after the government bailed them out to the tune of £65bn at the height of the banking crisis in 2008.
That £65 billion is worth more than all the planned spending cuts for this year as well as enough to fund the two wars we are currently engaged in. The bailing out of these banks has meant that money that could have been spent on the good of society has instead gone to re-capitalise these failed banks balance sheets.
The idea currently being floated about by Nick Clegg and others from both the Liberal and Conservative parties is that individual taxpayers would benefit from any long-term gains when shares in the banks are re-privatised.
They want to do this by giving each person on the electoral roll a number of shares which could then be sold on at a later date and would allow the British public to benefit from any share sale and pay them back for their help in bailing out the banks in the first place.
Under the plan, the 45 million people on the electoral roll would be given free shares in the bailed-out banks, Royal Bank of Scotland and Lloyds Banking Group but the shares would only have any value once they have reached a minimum price which would be equivalent to what the government paid for them in the first place. This way the Treasury would cover the cost of its investment and the people would benefit from any extra profit the shares might gain.
Currently the price that any profit would be gained would be once the shares reached prices of 74p for Lloyds and 51p for RBS.
Whilst this sounds like a good idea it needs to be tweaked quite considerably in my own humble opinion in the following ways:
1. Only current working people who are paying tax and national insurance should benefit from the payout. There is no moral right for people who are currently on benefits or didn’t have to contribute in any shape and form through loss of revenue from higher tax and national insurance contributions to gain from this payout.
2. The payout should only be given to those workers who are currently on wages of £100k a year or less. People who earn above this amount have no need for an extra £1k of shares and probably gained quite considerably from any market fluctuations anyway.
It is the people at the lower spectrum of society who are suffering the most from the closed libraries, crowded hospitals and doctors, lack of decent public transport and the huge jobs losses and public pension cuts that have been introduced due to the bankster bailout.
3. There should be no floor price which has to be met before the public gains from the share prices. The treasury will benefit more in the long run if every taxpayer is just given either the whole value of the shares or a lump sum payment to re-invest into the economy.
The government economists are always bleating on about lack of consumer confidence and the reason for this is that high inflation has meant people are less willing to spend money on luxuries when every penny is needed to pay for extortionate rents, high fuel costs and constantly rising food prices.
Giving each tax payer in the country a lump sum to spend as they see fit will do more to stimulate the economy, fill up high streets and offset the lack of availability of personal loans that the public currently face than any other stimulus measure tried so far or planned for the future.
So far the only similar stimulus measure has been the measly temporary drop in VAT last year which was a complete failure. Not only did it not sort out anything when the price drops were offset by magnitutdes of 10 or more during the winter Christmas sales but it cost billions and we are now having to pay for it now with a 20% VAT rate that has surely helped increase inflation and hurt consumer spending.
Like the current proposal a one off lump sum payment to lower paid taxpayers who are more likely to shop and spend their money on consumerables would have done a lot more to kick start our debt laden economy than previous bad ideas.
So in a similar vein I think the proposal to give every taxpayer a stake in the banks that ruined our country is a good idea in general.
As long as other measures are implemented to split up casino banks from high street banks and there is a concerted effort to investigate and punish properly the huge amounts of fraud and book cooking that the City engaged in for so long it might just be a small but significant way to pay the public back before they get so angry they just take the money straight from the banksters pockets without asking first.