Julian Knight: Free bank shares sound good – but just won't work

It took barely 24 hours for No 10 to close down Nick Clegg's idea that we should all be given shares in RBS and Lloyds.

Honestly, I'm not sure what to think of it. First, as if we needed another reminder, the quick move by Cameron's team to dampen down the plan shows that this is a rag-tag Government with one minister seemingly not knowing what the others are doing – in some ways almost a refreshing change after the control freakery of Alastair Campbell et al.

As for the idea itself, it has some initial appeal. I think taxpayers deserve a reward for the burden they had to suffer when taking on these bust banks, and will continue to endure through exceptionally high borrowing over the coming years. In a way it would be good as well to recapture that Eighties spirit of share ownership – where millions of us took a tangible interest in the markets.

However, thinking back to that time – and this is one major flaw in Clegg's plan – what happened following the great privatisations of BP, BT and British Gas was that millions of people who were allocated shares soon cashed them in for a profit, and these companies instead of having lots of little shareholders who took an active interest in the business soon became owned by the big city institutions and pension funds. The supposedly great Thatcherite Eighties share-holding democracy, if it ever actually existed, flickered briefly then died.

The same thing would only happen again as people inevitable cashed in their freebie shares. A better idea would actually be to mutualise both RBS and Lloyds – as I suggested for Northern Rock. It would be rather delicious in some ways to see the almost uniquely acquisitive culture at RBS deal with mutuality. Apparently, Sir Fred "the shred" Goodwin may be long gone from RBS but the management is littered with little shred wannabes. However, like the planned sale of Northern Rock – a technically easier and even better candidate for mutualisation – the Treasury will get its way and the proceeds of a sale of RBS and Lloyds will disappear into the nation's fiscal black hole.

Sharp elbows required

A timely warning this week from Adam Phillips, the chair of the Financial Services Consumer Panel, that he is seriously concerned that in the revamp of the FSA the consumer is being forgotten. In brief, Mr Phillips is concerned that the new regime will be focused solely on not repeating the banking crisis of 2008, rather than genuinely ensuring that banks, insurers and investment companies don't lie and cheat their customers – which every man and his dog knows they have a long track record of doing.

This has always been my concern – that in a Treasury with George Osborne at the top we will see the focus on the balance sheets but not enough care about the regular everyday experience of you and me with our finance companies. A Tory-led government is always going to be, by nature, opposed to interference in the everyday conduct of business. And although I have great sympathy with that view in many aspects of life – Ronald Reagan once said the scariest phrase in English was "hello, I am from the government" – in this area we need a pro-active regulator with the sharpest of elbows.

Direct question

First Direct has for the second year won the Which? bank customer service award. Apparently, First Direct offers customer service that approaches the heady levels of what would be judged just about acceptable in most other industries. But for me, rustling through my post-bag here – about 60 per cent bank complaints – the question isn't why is First Direct so good (it's not, as its decision to scrap paying interest on current accounts shows), but more why are the others so bad?

Remember Clotsdale

This is probably the first time the words subtlety and Australia have appeared in the same sentence, and I am, of course, being sarcastic. Having been to Oz a few times now – and admittedly loved the place – I can recall the average marketing and advertising campaign having all the nuance of being hit over the head with a dirty great big frying pan. If in doubt shout and make reference to the toilet – or dunny – seems to be the killer storyboard at most ad agencies.

But even by Antipodean standards the National Australia Bank surpassed itself by arranging for not one but two branch managers to be tied to lampposts in Sydney and Melbourne. This heinous act was said to have been carried out by rival banks angry at the NAB's "fantastic" range of cut-price product – yes, that is a groan forming in your throat. Bizarrely, this sub stag-do stunt helped NAB carry off a top PR prize in Cannes last week. Of course it's infantile, but harmless. But then I recall that NAB owns Clydesdale Bank – or Clotsdale as we like to call it in this column. The same bank that incompetently cocked up thousands of mortgage repayments and then ruthlessly tried to claw back every penny from its wronged customers and wouldn't for an age listen to reason. I bet quite a few of Clydesdale's customers would like to tie a banker to a lamppost – and not as part of a stunt.

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Sport
football This was Kane’s night, even if he played just a small part of it
Travel
travel Dreamland Margate, Britain’s oldest amusement park, is set to reopen
News
news
News
Founders James Brown and Tim Southwell with a mock-up of the first ever ‘Loaded’ magazine in 1994
media
News
Threlfall says: 'I am a guardian of the reality keys. I think I drive directors nuts'
people
Voices
voices The group has just unveiled a billion dollar plan to help nurse the British countryside back to health
News
The Westgate, a gay pub in the centre of Gloucester which played host to drag queens, has closed
news
Finacial products from our partners
Property search
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Retirement Coordinator - Financial Services

    Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...

    Recruitment Genius: Annuities / Pensions Administrator

    Negotiable: Recruitment Genius: You will be the first point of contact for all...

    Ashdown Group: HR, Payroll & Benefits Officer - Altrincham - up to £24,000.

    £18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...

    Ashdown Group: Learning and Development Programme Manager

    £35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...

    Day In a Page

    The saffron censorship that governs India: Why national pride and religious sentiment trump freedom of expression

    The saffron censorship that governs India

    Zareer Masani reveals why national pride and religious sentiment trump freedom of expression
    Prince Charles' 'black spider' letters to be published 'within weeks'

    Prince Charles' 'black spider' letters to be published 'within weeks'

    Supreme Court rules Dominic Grieve's ministerial veto was invalid
    Distressed Zayn Malik fans are cutting themselves - how did fandom get so dark?

    How did fandom get so dark?

    Grief over Zayn Malik's exit from One Direction seemed amusing until stories of mass 'cutting' emerged. Experts tell Gillian Orr the distress is real, and the girls need support
    The galaxy collisions that shed light on unseen parallel Universe

    The cosmic collisions that have shed light on unseen parallel Universe

    Dark matter study gives scientists insight into mystery of space
    The Swedes are adding a gender-neutral pronoun to their dictionary

    Swedes introduce gender-neutral pronoun

    Why, asks Simon Usborne, must English still struggle awkwardly with the likes of 's/he' and 'they'?
    Disney's mega money-making formula: 'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan

    Disney's mega money-making formula

    'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan
    Lobster has gone mainstream with supermarket bargains for £10 or less - but is it any good?

    Lobster has gone mainstream

    Anthea Gerrie, raised on meaty specimens from the waters around Maine, reveals how to cook up an affordable feast
    Easter 2015: 14 best decorations

    14 best Easter decorations

    Get into the Easter spirit with our pick of accessories, ornaments and tableware
    Paul Scholes column: Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season

    Paul Scholes column

    Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season
    Inside the Kansas greenhouses where Monsanto is 'playing God' with the future of the planet

    The future of GM

    The greenhouses where Monsanto 'plays God' with the future of the planet
    Britain's mild winters could be numbered: why global warming is leaving UK chillier

    Britain's mild winters could be numbered

    Gulf Stream is slowing down faster than ever, scientists say
    Government gives £250,000 to Independent appeal

    Government gives £250,000 to Independent appeal

    Donation brings total raised by Homeless Veterans campaign to at least £1.25m
    Oh dear, the most borrowed book at Bank of England library doesn't inspire confidence

    The most borrowed book at Bank of England library? Oh dear

    The book's fifth edition is used for Edexcel exams
    Cowslips vs honeysuckle: The hunt for the UK’s favourite wildflower

    Cowslips vs honeysuckle

    It's the hunt for UK’s favourite wildflower
    Child abuse scandal: Did a botched blackmail attempt by South African intelligence help Cyril Smith escape justice?

    Did a botched blackmail attempt help Cyril Smith escape justice?

    A fresh twist reveals the Liberal MP was targeted by the notorious South African intelligence agency Boss