Gordon’s legacy, Osborne’s heist

By Sue Marsh / @suey2y

During coalition talks, I didn’t want a Labour deal, but one thing – just one – struck terror into my heart.

It would mean that almost any level of incompetence on the part of the Baby-Chancellor could be wiped out at a stroke. It meant that he could rampage through our country, indiscriminately making sick people and poor people and elderly people hurt, then, with the wave of an old magic wand, left behind by Gordon Brown, he could give vast tax breaks to Tory voters just in time for the election.

Are we that naive? Oh hell yes.

Are we that shallow? Well, I don’t like to say it…

When the banks failed, there is one act, that no-one – surely not even the most arch-Tory – could deny was a master-stroke. Of course George Osborne opposed it – he opposed just about everything that worked – but Gordon pulled off a coup so canny, so well timed, that in Monopoly terms, it was the equivalent of building a hotel on Mayfair.

He bought 41% of Lloyds TSB at an all time low share price (ave) of 74p per share. It cost us, the UK public, £37 Billion. Shares which at their peak pre-credit-crunch price had been trading at over £2.60 per share.

He bought 84% of RBS shares at an average price of 50.2p per share. It cost us, the UK public, £45.5 Billion. Shares which at their peak pre-credit crunch price had been trading at over £6 per share.

If anyone, in the history of the stock market ever made a better trade, I’d like him or her to step forward.

Today, Bloomberg report that :

“A sale of the British taxpayer’s 65.8 billion-pound (7 billion) stake in Lloyds Banking Group Plc (LLOY) and Royal Bank of Scotland Group Plc (RBS) is likely to start next year, creating a one-time budget windfall before the next election, according to four people familiar with the talks.”

“That level of windfall would open the way for tax cuts in the run up to the next election,” said Mark Wickham-Jones, professor of politics at Bristol University. “That could be a remarkable opportunity for the coalition.”

It almost doesn’t even matter if these shares make a profit any more. The money is long spent, and no-one will say too much if billions flood into the treasury, even if they aren’t quite the billions we already spent.

Doesn’t it make you want to vomit into your cornflakes?

So between now and the next election in 2015, I will occasionally devote this little corner of the internet to reminding everyone that this was our money. It added to our debt. And every last penny of profit these shares make was Gordon Brown’s legacy.

Politics is a dirty game and I don’t doubt for one second that if the tables were turned, Labour would capitalise on a huge heap of free cash too, but none of us should forget that Gideon thought we should let these banks fail. Had he been in charge, there would only have been loss – not profit.

I imagine that in a flurry of smugness, just before the May election, the Baby-Chancellor will cut the top rate of tax from 50% to 40%, possibly cut inheritance tax and maybe garnish with a marriage tax break. With some of Gordon’s banking billions, he’ll throw us a few hospital crumbs or a few billion here and there to stick a plaster over the huge devastation he’s otherwise caused.

Oh how we’ll cheer. Oh how glad we’ll be that finally, Osborne’s plans have paid off and we can spend, spend, spend again.

But they won’t be Osborne’s plans, they’ll be Gordon’s. Yet again, Gordon Brown will be saving the UK economy, but this time it will be from greedy, arrogant Tories rather than greedy, arrogant bankers.