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?

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

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Cabinet audit: what does the appointment of Andrea Leadsom as Environment Secretary mean for policy?

The political and policy-based implications of the new Secretary of State for Environment, Food and Rural Affairs.

A little over a week into Andrea Leadsom’s new role as Secretary of State for Environment, Food and Rural Affairs (Defra), and senior industry figures are already questioning her credentials. A growing list of campaigners have called for her resignation, and even the Cabinet Office implied that her department's responsibilities will be downgraded.

So far, so bad.

The appointment would appear to be something of a consolation prize, coming just days after Leadsom pulled out of the Conservative leadership race and allowed Theresa May to enter No 10 unopposed.

Yet while Leadsom may have been able to twist the truth on her CV in the City, no amount of tampering will improve the agriculture-related side to her record: one barely exists. In fact, recent statements made on the subject have only added to her reputation for vacuous opinion: “It would make so much more sense if those with the big fields do the sheep, and those with the hill farms do the butterflies,” she told an audience assembled for a referendum debate. No matter the livelihoods of thousands of the UK’s hilltop sheep farmers, then? No need for butterflies outside of national parks?

Normally such a lack of experience is unsurprising. The department has gained a reputation as something of a ministerial backwater; a useful place to send problematic colleagues for some sobering time-out.

But these are not normal times.

As Brexit negotiations unfold, Defra will be central to establishing new, domestic policies for UK food and farming; sectors worth around £108bn to the economy and responsible for employing one in eight of the population.

In this context, Leadsom’s appointment seems, at best, a misguided attempt to make the architects of Brexit either live up to their promises or be seen to fail in the attempt.

At worst, May might actually think she is a good fit for the job. Leadsom’s one, water-tight credential – her commitment to opposing restraints on industry – certainly has its upsides for a Prime Minister in need of an alternative to the EU’s Common Agricultural Policy (CAP); a policy responsible for around 40 per cent the entire EU budget.

Why not leave such a daunting task in the hands of someone with an instinct for “abolishing” subsidies  thus freeing up money to spend elsewhere?

As with most things to do with the EU, CAP has some major cons and some equally compelling pros. Take the fact that 80 per cent of CAP aid is paid out to the richest 25 per cent of farmers (most of whom are either landed gentry or vast, industrialised, mega-farmers). But then offset this against the provision of vital lifelines for some of the UK’s most conscientious, local and insecure of food producers.

The NFU told the New Statesman that there are many issues in need of urgent attention; from an improved Basic Payment Scheme, to guarantees for agri-environment funding, and a commitment to the 25-year TB eradication strategy. But that they also hope, above all, “that Mrs Leadsom will champion British food and farming. Our industry has a great story to tell”.

The construction of a new domestic agricultural policy is a once-in-a-generation opportunity for Britain to truly decide where its priorities for food and environment lie, as well as to which kind of farmers (as well as which countries) it wants to delegate their delivery.

In the context of so much uncertainty and such great opportunity, Leadsom has a tough job ahead of her. And no amount of “speaking as a mother” will change that.

India Bourke is the New Statesman's editorial assistant.