I rather like Stephen Williams’ plan that all UK shareholders should be given equal shares in the two banks in which the government is majority shareholder. It seems to me an entirely fair way of returning our investment into the hands of the people, and when the shares get sold the government recoups its money (which sits outside of the budget anyway). What’s more, the government may well get a greater return on its investment than a ‘conventional’ privatization as well, and everybody, not just those with capital to invest, owns the banks. The problem with conventional privatisations (alright, one of the problems..) is that even if you can invest, you end up paying for something you already own (which is also why I’ve never paid the admission money for a tour of Buckingham Palace…).
But best of all – and I’m surprised this isn’t the clincher for more people – as shareholders, we would get to vote on bankers pay and bonuses. I think we all know how that would go…
So far I’ve seen four arguments against. I’m not sure any of them hold water. They are:
1. ‘We can’t afford to give the money away’.
But we’re not. When citizens sell their shares, the government gets the investment back. We just keep any profit (in effect, it’s a share option hurdle scheme)
2. ‘Individuals would have too small a shareholding to make a difference’
(Put forward by Liberal Vision).
Afraid I beg to differ. If individuals can be trusted to elect a government, they can certainly be organized enough to decide on some bank governance issues – like do we want the CEO to be paid a multi million pound bonus. It’s generally called the wisdom of the masses.
Just to re emphasis the point, currently the average share in the US is owned for…20 seconds, thanks to High Frequency Trading (hat tip to Liberal Eye for this amazing fact). So much for institutions being the best guardians of shareholder interests. Let the people have a turn.
3. ‘Shares should be divided according to how much tax an individual has paid, not equally’
(as put forward by Liberal Vision)
Nope. Equal share distribution by head would be a progressive and liberal way of divvying up the shares. Let’s not forget everyone – we’re all in this together!!
4. ‘Russian oligarchs will swoop in and buy our shares at knock down prices’
(as put forward by the Adam Smith institute).
But in fact the shares would be traded on a unique platform designed to prevent this sort of abuse. (see penultimate paragraph in linked article).
Now of course I’m not saying the idea is perfect – there are a lot of details to work out yet. But it’s creative, novel, fair, principled, progressive….
Even Andrew Neil seemed for it yesterday
Really – what’s not to like?