Wrong place, wrong time: Osborne has set a bad example to the City

Outlook

George Osborne has hailed the Google tax deal as a 'major success' (Getty)

Politicians love their photo opportunities at places where real people work. The trouble is, real people don’t tend to find them very interesting. Trust George Osborne to find a way around that: on a visit to the Airbus factory in Bristol, he announced he was suspending the planned discounted sale of Lloyds shares to taxpayers like you and me.

The problem? Where was the announcement to the Stock Exchange? That might sound a technical issue, but it’s actually rather important. Everyone would like the City to behave a bit better – and not just by bringing the curtain down on things like rigging markets, ripping off customers and taking crazy bets with other people’s money. As well as obeying the rules, most, including quite a few working in the Square Mile, would like to see the financial centre conducting itself with a modicum of decency because it is quite possible to make pots of money while playing fair. But how can we expect the City to behave better when politicians set such an bad example?

It’s not that Mr Osborne broke any rules. When he tweeted, “We’ll build a share owning democracy. So British people can buy Lloyds shares but we’ll only sell when turbulent markets have calmed down”, few could have disagreed. Although it should be said that British people have always been able to buy shares in Lloyds, cheaply, through any online stockbroker.

But that isn’t the point. The tweet, the announcement and everything that followed should have been preceded by an announcement to the Stock Exchange. In that way, every Lloyds shareholder would have known at the same time that the Chancellor planned to sit on his hands until the markets calmed down. A good example would have been sent to the City: this is how we’re going to do things –so should you.

Political expediency took precedence, however, and it wasn’t just because of the photo op. Mr Osborne wanted to draw some of the focus away from the sweetheart tax deal with Google that has (rightly) made people cross because it involves the internet search giant paying just £130m for 10 years of UK trading. The tactic wasn’t a great success. He was still called upon to defend the deal by rehashing the specious claim that it was a good one for Britain. So, the overall grade? Remind me, what comes after E again?