Fancy some free money? The Government’s dishing it out...
Or at least it will be if LibDem MP Stephen Williams (Bristol West) has his way. He is chair of the LibDem Treasury Parliamentary committee and he thinks the Government’s shares in banking giants Lloyds TSB and RBS should be dished out to the public, who can sell them and pocket any profit.
Now that the banks’ fortunes seems to be turning, even if Barclays head honcho *only* received remuneration of £9million for 2010 (come on now, I am sure he works really hard for it) becoming a shareholder in the banks could prove to be a nice little earner for the 45 million adults (children don’t count, sorry) who would benefit under the proposals.
The plan is for each adult on the electoral role to receive 1,484 shares in RBS and 456 in Lloyds with a "floor" price set, so that they could not be sold until they had passed the price paid by the Government when it bailed out the two banks at the height of the financial crisis. On sale, the Government would receive proceeds up to the floor price, to make sure the country got its money back, with individuals keeping any gains made above that level.
If for example the floor price was set at 50.5p for RBS and 74p for Lloyds - the average paid by the Government - and their shares rose to 75p and £1.10p, the profit per person would be more than £500. That’s each. In free money.
The proposals also suggest a share dealing account is set up for every individual, with a default option to sell the shares on their behalf within two to three years, although people could opt out and trade the shares themselves. Speaking on Radio 2 yesterday Stephen Williams described the measure as a way for the public to get back some of what everyone had lost through the financial crisis.
However, the naysayers have been sticking their beak in and there have been many obstacles put forward- whether the shares should only be received by taxpayers, rather than citizens, whether bankrupts or higher rate taxpayers should be excluded, and my own personal favourite, that giving people shares in only 2 companies does not encourage a risk diversified portfolio and would confuse the majority of the population. What's confusing about free money?
Of course, despite being part of the Government, the LibDems’ proposal is not at all sure of adoption, but surely Dave, who wants us all to be in it together, will chuck some free cash our way. And if not, we will all want to know why not...