Today's interview in the Sunday Times with George Osborne provides further evidence that the Conservative Party still haven't made time in his busy schedule for that Economics 'A' level that he so badly needs.
His suggestion that a Conservative government might sell off its shareholdings in the banks at a discount in order to offer the public a 'people's bank bonus' is, in the shallowest sense, good politics, in that it will be popular. However, the country's finances are in crisis, the national debt enormous, and the burden of servicing that date a heavy one. So how would giving state assets away at a discount actually help?
Yes, those people who buy those shares will have an immediate profit. However, they are people who have money anyway. Those who don't have money won't buy any, so they will remain without. So, George is calling for a redistribution of Government assets to the comparatively well-off. That would be a bribe then...
I would have thought that any Government would have a responsibility to get the best price for those shares that it could, and use the funds raised to lower debt levels - in the same way that a household would arrange its affairs. Instead, George wants to be altruistic with my money, having spent so much time telling me how much of a debt Gordon Brown has run up on my behalf.
I have no objection to selling off the shares. Indeed, I would accept the premise that, in an ideal world, the Government would divest itself of the shareholdings in the likes of Lloyds TSB or HBOS, because I have never believed that governments are terribly good at active shareholding. However, the market decides how much those shares are worth, that figure is factored into the Government's finances, and potential purchasers of gilts and the like value those assets on a cold calculation of expected profit. For George to announce that he will effectively write off a proportion of their worth is to encourage overseas investors to be nervous. At the moment, nervous isn't good.
But how much will the potential profit for those purchasing shares actually be? Who knows, after all, these plans are still being drawn up, although the suggestion is that people would be offered shares worth between a few hundred and a few thousand pounds. So, unless there will be a really serious discount, you'll need to be at the 'few thousand' end to make a profit worth having, a profit that will be on paper only, unless the shares are sold on.
And so, yet again, George demonstrates his flair for low politics and his disregard for those at the bottom end of the economy by promoting a scheme that will hand money to those who have already, people like him. Perhaps he might like to go to a Peckham housing estate and explain how his cunning plan will help them?