The "people's bonus": which people, and at what cost?

Could George Osborne's "people's bonus" rescue the Conservatives' election prospects?

In an interview in today's Sunday Times -- a day before the taxpayer-owned RBS and Lloyds banks are set to announce £1.5bn of bonuses -- the Tory shadow chancellor, George Osborne, outlines a new policy:

The bankers have had their bonuses. We want a people's bank bonus for the people's money that was put into these organisations.

What it boils down to is the idea of offering cheap shares in the taxpayer-owned banks to ordinary families when the government's £70bn of shares are sold off. The Sunday Times interview frames it as a Tory attempt to seize back the election and give a positive edge to what has been an overwhelmingly negative election campaign.

Osborne couched his suggestion in diction that plays into public anger with the banks, speaking of the need to "recapitalise the poor". This certainly appears to be in keeping with the public mood. A YouGov poll for the think tank Compass, published today, showed the extent of public anger with the financial system. Three out of four people said they did not think that the banks had changed, and that they were still not being properly regulated, while 76 per cent of people wanted a cap on bonuses and 59 per cent supported a windfall bonus tax.

But although Osborne talks the talk -- the "people's bonus" suggesting a pleasing settling of scores -- is it really such a revolutionary move?

In fact, the proposal is a direct, and conscious, echo of Margaret Thatcher's privatisation of British Gas and British Telecom in the 1980s, when the number of British shareholders tripled. "It will be like the public offerings of shares such as the Tell Sid campaign of the mid-Eighties," said Osborne.

This was vote-winning for Thatcher, but the climate has changed: as the Compass poll shows, much of the current anger relates to the perceived injustice of banks going back to business as usual amid insufficient regulation, while the rest of society continues to suffer. Selling off cheap shares will do little to tackle the perception of a sector running out of control as jobs are lost elsewhere.

Labour and the Liberal Democrats have jumped to attack the plans. On the BBC's Andrew Marr Show this morning, the Business Secretary, Lord Mandelson, dismissed it as "a silly little gimmick" and "headline-grabbing incoherence". He argued that it contradicted the Tory emphasis on reducing the Budget deficit, asking: "What on earth are they doing giving away the shares at a knock-down price?"

The Lib Dem Treasury spokesman, Vince Cable, also criticised the plan, saying that it "beggars belief" to encourage the less well-off to invest in a volatile stock market. "The nationalised and semi-nationalised banks should be reprivatised when the conditions are right to maximise taxpayer return," he said. "Selling shares off at a discounted rate will not achieve this."

They have a point: if the focus is on reducing the Budget deficit and ensuring that the taxpayers' money is returned, it makes sense to sell off the shares at a time that will make maximum profit for the government. Moreover, the demographic of those investing in the stock market is unlikely to include the least well-off, who will nonetheless bear the brunt in the extra taxation that will be necessary if the government has not recovered all the bailout money.

Of the people's bonus, then, we must ask -- which people, and at what cost?

Follow the New Statesman team on Twitter.

Samira Shackle is a freelance journalist, who tweets @samirashackle. She was formerly a staff writer for the New Statesman.

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The 11 things we know after the Brexit plan debate

Labour may just have fallen into a trap. 

On Wednesday, both Labour and Tory MPs filed out of the Commons together to back a motion calling on the Prime Minister to commit to publish the government’s Brexit plan before Article 50 is triggered in March 2017. 

The motion was proposed by Labour, but the government agreed to back it after inserting its own amendment calling on MPs to “respect the wishes of the United Kingdom” and adhere to the original timetable. 

With questions on everything from the customs union to the Northern Irish border, it is clear that the Brexit minister David Davis will have a busy Christmas. Meanwhile, his declared intention to stay schtum about the meat of Brexit negotiations for now means the nation has been hanging off every titbit of news, including a snapped memo reading “have cake and eat it”. 

So, with confusion abounding, here is what we know from the Brexit plan debate: 

1. The government will set out a Brexit plan before triggering Article 50

The Brexit minister David Davis said that Parliament will get to hear the government’s “strategic plans” ahead of triggering Article 50, but that this will not include anything that will “jeopardise our negotiating position”. 

While this is something of a victory for the Remain MPs and the Opposition, the devil is in the detail. For example, this could still mean anything from a white paper to a brief description released days before the March deadline.

2. Parliament will get a say on converting EU law into UK law

Davis repeated that the Great Repeal Bill, which scraps the European Communities Act 1972, will be presented to the Commons during the two-year period following Article 50.

He said: “After that there will be a series of consequential legislative measures, some primary, some secondary, and on every measure the House will have a vote and say.”

In other words, MPs will get to debate how existing EU law is converted to UK law. But, crucially, that isn’t the same as getting to debate the trade negotiations. And the crucial trade-off between access to the single market versus freedom of movement is likely to be decided there. 

3. Parliament is almost sure to get a final vote on the Brexit deal

The European Parliament is expected to vote on the final Brexit deal, which means the government accepts it also needs parliamentary approval. Davis said: “It is inconceivable to me that if the European Parliament has a vote, this House does not.”

Davis also pledged to keep MPs as well-informed as MEPs will be.

However, as shadow Brexit secretary Keir Starmer pointed out to The New Statesman, this could still leave MPs facing the choice of passing a Brexit deal they disagree with or plunging into a post-EU abyss. 

4. The government still plans to trigger Article 50 in March

With German and French elections planned for 2017, Labour MP Geraint Davies asked if there was any point triggering Article 50 before the autumn. 

But Davis said there were 15 elections scheduled during the negotiation process, so such kind of delay was “simply not possible”. 

5. Themed debates are a clue to Brexit priorities

One way to get a measure of the government’s priorities is the themed debates it is holding on various areas covered by EU law, including two already held on workers’ rights and transport.  

Davis mentioned themed debates as a key way his department would be held to account. 

It's not exactly disclosure, but it is one step better than relying on a camera man papping advisers as they walk into No.10 with their notes on show. 

6. The immigration policy is likely to focus on unskilled migrants

At the Tory party conference, Theresa May hinted at a draconian immigration policy that had little time for “citizens of the world”, while Davis said the “clear message” from the Brexit vote was “control immigration”.

He struck a softer tone in the debate, saying: “Free movement of people cannot continue as it is now, but this will not mean pulling up the drawbridge.”

The government would try to win “the global battle for talent”, he added. If the government intends to stick to its migration target and, as this suggests, will keep the criteria for skilled immigrants flexible, the main target for a clampdown is clearly unskilled labour.  

7. The government is still trying to stay in the customs union

Pressed about the customs union by Anna Soubry, the outspoken Tory backbencher, Davis said the government is looking at “several options”. This includes Norway, which is in the single market but not the customs union, and Switzerland, which is in neither but has a customs agreement. 

(For what it's worth, the EU describes this as "a series of bilateral agreements where Switzerland has agreed to take on certain aspects of EU legislation in exchange for accessing the EU's single market". It also notes that Swiss exports to the EU are focused on a few sectors, like chemicals, machinery and, yes, watches.)

8. The government wants the status quo on security

Davis said that on security and law enforcement “our aim is to preserve the current relationship as best we can”. 

He said there is a “clear mutual interest in continued co-operation” and signalled a willingness for the UK to pitch in to ensure Europe is secure across borders. 

One of the big tests for this commitment will be if the government opts into Europol legislation which comes into force next year.

9. The Chancellor is wooing industries

Robin Walker, the under-secretary for Brexit, said Philip Hammond and Brexit ministers were meeting organisations in the City, and had also met representatives from the aerospace, energy, farming, chemicals, car manufacturing and tourism industries. 

However, Labour has already attacked the government for playing favourites with its secretive Nissan deal. Brexit ministers have a fine line to walk between diplomacy and what looks like a bribe. 

10. Devolved administrations are causing trouble

A meeting with leaders of Scotland, Wales and Northern Ireland ended badly, with the First Minister of Scotland Nicola Sturgeon publicly declaring it “deeply frustrating”. The Scottish government has since ramped up its attempts to block Brexit in the courts. 

Walker took a more conciliatory tone, saying that the PM was “committed to full engagement with the devolved administrations” and said he undertook the task of “listening to the concerns” of their representatives. 

11. Remain MPs may have just voted for a trap

Those MPs backing Remain were divided on whether to back the debate with the government’s amendment, with the Green co-leader Caroline Lucas calling it “the Tories’ trap”.

She argued that it meant signing up to invoking Article 50 by March, and imposing a “tight timetable” and “arbitrary deadline”, all for a vaguely-worded Brexit plan. In the end, Lucas was one of the Remainers who voted against the motion, along with the SNP. 

George agrees – you can read his analysis of the Brexit trap here

Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.