Gina Davidson: Bank on public share sales loss

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NEXT year will be the 30th anniversary of the privatisation of British Gas; last year saw the same milestone for British Telecom.

It’s hard to believe either of these massive companies were once state owned; hard to recall the political furore their sell-off provoked. Privatisation has gone from being a dirty word in centre-left circles to just the order of the day for governments in need of a money-raising scheme, no matter their political hue.

Public enthusiasm for privatisation was at its peak in the early 1980s. The sell-off of British Gas saw 1.5 million people buying shares in the £5.6 billion flotation – although it was criticised by Tony Blair as being sold on the cheap. Blair, then a Labour Treasury spokesman, said taxpayers had lost at least £600m through the shares being underpriced. The government didn’t care – it was making people shareholders. No matter the same people – indeed, all the people – owned the institutions already.

Like it or loathe privatisation, Margaret Thatcher thought there was something democratic about giving people the chance to be shareholders, to be “ordinary investors”. She cared less about the jobs shed, lives ruined.

But it was also about rebalancing the economy, bringing down the public sector debt after recession, and making government smaller.

The same rhetoric was used when the Royal Mail was sold off two years ago – again under-priced. It’s the same reasoning used this week to tell us it was a good deal to begin selling off the public’s stake in RBS even though it was done at a huge loss.

Now you may well disagree with the bank bail-out decisions taken by Gordon Brown and Alistair Darling. I don’t. I also don’t have any issue with the idea of a state-owned bank.

However, it was always the plan that the government’s stake in RBS would be sold when the bank began to make a profit once more. The idea being that when re-privatisation began, the taxpayer would not make a loss on the bail out. To that end, thousands of jobs have been lost as RBS tries to restructure and save money.

Well, expect more jobs to go once these new shareholders start to make noises. Forget Thatcher’s idea of ordinary investors, this Tory government gives preference to “institutional investors”, the kind who will demand more cuts if it makes their shares more valuable. And the government is happy to make a £1bn loss on the sale to keep their friends in the City happy.

Why were the shares sold at just 330p when they were bought at 502p and when RBS had better than expected results just last week, with the bank returning to profit. Also, why were 60 per cent of the £2.1bn shares sold to hedge funds and the remaining 40 per cent to institutional investors – less than half of whom are based in Britain. Why were no “ordinary” people able to buy them?

It’s been the same story at Royal Mail – two months ago the government got rid of half its remaining 30 per cent stake in the company to “institutional investors” for £750m.

For long enough we’ve been told the country’s economy is the same as an ordinary households’ – when debt is high, you start repaying it, making sacrifices elsewhere. But no household in Britain would start flogging the silverware at a loss. If it means keeping RBS in all our ordinary hands for longer, the reprivatisation plan should be put back on the shelf.

Perfection? No, but we’re not that bad either

THE letter by US tourist Grace Migliaccio in which she painted a very dismal view of Edinburgh certainly touched a few nerves. The responses ranged in spectrum from absolute refusal to believe she might have a point to complete and utter agreement and warnings that the city is becoming a slum.

Part of what makes Edinburgh fantastic is that it’s a living city, not some kind of sterile, Disney-fied creation. It has a historical centre which tourists flock to see, but it’s also where people live and work and play. That undoubtedly leads to litter and mess, so of course it’s a constant battle to tidy the place up. We could probably all do more to help with that.

She has valid criticism of parking – the meters are out of date, they should accept cards, or the Ringo system should be able to deal with foreign mobile phones.

And it is quite outrageous that a bank wouldn’t give change to a tourist so she could park. That is definitely inhospitable.

Basically, she had a bad day. We’ve all had them – in Edinburgh, or abroad. Let’s not get too worked up about it. But if it reminds us all to put our rubbish in the bin, and the council to empty them more often, then it’s done some good.

Scam will drive you to distraction

IF YOU’re looking for work, beware of a scam doing the rounds.

Using recruitment agencies’ CV pages to get people’s email addresses, the con artists are offering “driving work”, which involves being a personal driver to a visiting businessman or woman. They want you to drive them round Edinburgh’s business district through the week and tourist spots at weekend – and will pay handsomely. Even more, they

will initially pay you before they arrive – via a money order or traveller’s cheque – so you can hire a car: they want a Mercedes and will give you the details of where to hire it.

Of course, the whole thing is a total scam with the aim of laundering money through the “driver’s” bank account. Jobseekers beware.


CONGRATULATIONS to all the teenagers who passed their exams this week – and commiserations to those who failed, or even didn’t get quite what they’d hoped. I know how that feels, but don’t let it hold you back. There’s always next year or even the following one. Education is a lifelong wonder.