Nick Faith: Osborne should use the Lloyds sell-off to put money in all our pockets
Nick Faith is Director of Communications at Policy Exchange. Follow Nick on Twitter.
Expect to hear about living standards – stagnant pay packets, zero hours contracts, a lack of affordable housing, rising energy and water bills – from Ed Miliband in Brighton next week. The Labour leader knows that his party’s greatest electoral advantage is painting the Conservatives as looking out for their wealthy friends, not hard-pressed families struggling to get by even when the national economy is seemingly on the road to recovery.
Osborne knew he had to pre-empt Labour’s attack. Last week, he delivered an important speech. He signalled that while the economy was showing positive signs of life, much more needed to be done to ensure that everyone in the country could benefit from the proceeds of growth. The real challenge for the Chancellor is to show the British public that he can deliver on his promises. To do that he will need to announce a coherent set of economically sensible policies that cuts through to people already deeply disillusioned with politicians and distrustful of big shiny policies.
My colleague, James Barty, formerly of Deutsche Bank, has come up with such a solution. He thinks that the government should give away the remaining shares to anyone in the country who is on the electoral roll and has a National Insurance number. Unlike Thatcher’s privatisations of the 1980s, people would not have to pay a penny to receive their allocation of shares. The government would, instead, allocate a floor price so that the taxpayer benefits from any rise in the share price but would be immune from loss if the price falls under the floor. If, as some analysts are predicting, the price of Lloyds rises to 100 pence and we assume that 25 million people apply for their free shares in the bank, then every individual could expect to pocket at least £230 in the not so distant future.
Of course, giving away shares in Lloyds is only one of many solutions the government should consider to tackle the living standards questions but if. But if the Chancellor is looking to demonstrate that he really does want to help hard-pressed people up and down the country, then putting an extra couple of hundred pounds in people’s pockets is not to be sniffed at.