Another fine mess of an idea from The Laurel & Hardy Institute of Fiscal Studies

The Tories are on a roll.  Another ripper of an idea has just entered the astonishing  mind of George Osbore and his team at the Laurel & Hardy Institute of Fiscal Studies.

The BBC reports:

The public could be offered discounted shares in state-owned banks under a “people’s bonus” plan outlined by Tory shadow chancellor George Osborne.

In a Sunday Times interview, Mr Osborne said the measure would be a reward for the £850bn of public money used to prop up failing financial institutions. Young people and those on low incomes would be offered extra discounts.

Labour called the plan an “expensive political gimmick”, while the Lib Dems said it was an attempt to buy votes.

Mr Osborne told the Sunday Times: “The bankers have had their bonuses. We want a people’s bank bonus for the people’s money that was put into these organisations.” It was expected people would be offered shares worth between a few hundred and few thousand pounds at a discount on the market price, the paper reported.

There could be extra discounts for young people, low-income families and parents saving for their children.

Osbore wants people to ‘save’ – what a  marvellous idea to get people who are already over stretched with debt to get into even more debt by buying shares in one of the most volatile shares in the market.

To be fair to Osbore he did say the share offer would only be made when the banks were properly regulated and could not take the kinds of risks that preceded the recession. It could be some time before we see hordes of people pushing prams and wearing tracksuits or impeccably kitted out in Boden or Hackett kit rushing to the Banks to buy the shares.  Given that the shares are only worth about a third of what the government paid for them – the economics are not looking too good.

I’m with Vince Cable on this one….

Encouraging people on low incomes to invest in a volatile share market shows how removed the Tories are from everyday reality
…A young couple on low income is more concerned with putting food on the table than speculating on the stock market.
Vince Cable
Lib Dem Treasury spokesman

3 thoughts on “Another fine mess of an idea from The Laurel & Hardy Institute of Fiscal Studies

  1. The vast majority of young people I know would not be able to invest in anything let alone something as risky as banking. After all, who could trust either the bankers or the regulatory system. [Lest it be forgot, Gordon Brown was instrumental in setting up the regulatory regime which proved to be so ineffective in the period up to late 2008].

    Fairly frequent changes of government are necessary to prevent arrogance and misuse of power. We also need new blood and new ideas in politics. I think that the time has come when the British people ought to vote for a change of government.

    Labour have been in power since 1997. I would not deny that they achieved some good things but, in my view, they were achieved mostly in their first term. I would include the Human Rights Act 1998 as one (and perhaps the best) of them. Since those early days. they have become arrogant and overbearing. Their policies have created a great deal of damage.

    I have long argued that it was not a foregone conclusion that Labour would lose the next election. The Tories have always had a mountain to climb and some of the statements issuing from Central Office have been risible. I am therefore with Heseltine who argues that the Conservatives might not have an overall majority:

    http://www.dailymail.co.uk/news/article-1252648/Tories-poll-leads-narrows-Heseltine-warns-win-outright.html

    I am also with John Major who points out the poor record of Labour:

    http://www.dailymail.co.uk/debate/article-1252642/SIR-JOHN-MAJOR-From-1994-onwards-Labour-existed-win-elections-They-mortgaged-nations-future-buy-votes-Were-paying-bill.html

    Is it not interesting that even Labour have said to their supporters: don’t fight the election on our record.

    The nation needs a change of government. None of the alternatives to Labour are particularly endearing but I do not believe that it is “better the devil you know.” Only a change of management will bring back the confidence needed to even begin the process of getting out of the present crisis.

  2. Obiter J – As usual, your observations are interesting.

    Looking at histroy certainly reveals that governments get tired – but I take the view that a new government should win, rather than get in by default. there are still (I hope) many on the Labour left who could take policy forward and govern well.

    My problem is with Brown – who I have long regarded as a poor leader. Today’s Rawnsley revelations have been well signalled – but it really is time for a change from brown and I suspect the country will vote the Tories in.

  3. call me old and boring if you will, but how would they get round the issue of diluting existing shareholders? they are going to feel royally fucked over. fortunately when the tories take power, that will be a truly democratic experience as we will all be ‘enjoying’ that particular sensation come the next election.

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