Above George Osborne AND BOSS! British Gazette Readers will know that your Editor has a shareholding in Lloyds Bank. My late father relied heavily on these shares for retirement income and had I and my late mother not had persuaded him to sell the greater part of these in the 1990s, my financial difficulties after October 2008 would have been even worse!
It was thus with some interest that I listened to the news report yesterday that the Chancellor tweeted above.
Of course, Our Friend’s announcement is like a duck paddling on a duck pond, the animal looks serene as it moves across the water but underneath there is a whole lot of paddling going on!
So to paraphrase a certain Mr Donald Trump, “What the hell is going on?”
What we have is a classic squabble between interested parties. The parties are, the Treasury led by the aforementioned George, then of course we have George’s boss, Mvr Margrethe Vestager, a nice Dutch lady who is the EU Competition Commissioner. George does not like to mention Mvr Vestager as it bursts the balloon of pretence that the UK is an independent country! Then we have the long suffering and much put upon Senhor António Horta-Osório, Executive Director and Group Chief Executive of Lloyds Banking Group. Then we have the numerous representatives of the “institutional investors” who own most of Lloyds Bank. Who are these folk? They are the insurance companies and pension funds. In other word’s Dear Reader, they represent you if you have an insurance policy or a private pension!
Of course it is all very well to take the words of Mr Osborne at face value, but what lies behind them? Well the reason for the turbulence of the stock market are widely known and need not be reiterated here. However, so far as Lloyds Bank is concerned there is a continuing problem of “mis-selling PPI.”
A little explanation is required: Payment Protection Insurance is something that lenders asked borrowers to take out to cover loan repayments in the event the borrower became unemployed or ill and unable to work. The problem was caused by the staff selling these policies to people who were not working or self employed. This is because the insurance policies excluded these people. This meant that the premiums paid by these people were for nothing. As such these people – and there are many of them – are entitled to compensation.
In so far as Lloyds Banking Group is concerned most of these claims have emanated from Halifax/Bank of Scotland!
LOADS OF MONEY has been paid out but Lloyds Bank and the “institutional investors” want a claims cut off date to be set, whereby any claim submitted after this will be invalid. They state (correctly) that this will encourage those who have not already made a claim to “get their finger out!”
What will happen after this date?
Well, Lloyds have been salting away HUGE amounts of CASH. This cash is know as “set aside” and the day after the claim by date is passed any CASH that has not been paid out to claimants will be able to be spent by the bank! There is likely to be a LOT of CASH! Lloyds will have a choice of how to spend all this lively dosh. They could reinvest it in the business. They could buy their own shares (this concentrates the assets of the company in a smaller number of shares so make the shares remaining in the market more valuable) or they can pay the money out to shareholders in the form of what is known as a “Special Dividend” – what will probably transpire is a combination of all three.
We do know TWO THINGS:
Comrade Corbyn will foam at the mouth in apoplectic rage should all or part of this money be paid in the form of a “Special Dividend”!!!
Very long suffering shareholders such as your Editor would very much like to receive the cash in the form of a “Special Dividend” as we have suffered from a loss on money for many years now. I can report to you Dear Reader than back in 2008 I attended the Extraordinary General Meeting that was held at the NEC in Birmingham that Lloyds Bank held to accept the government proposal to takeover the busted bank Halifax.
Mention the words “private shareholder” to the average left wing supporter of Comrade Corbyn and the image of a latter day Bertie Wooster type of “Upper Class Twit” will come into mind. The FACTS of course are different. Although such types do still exist, they form a vanishingly small proportion of the shareholder base in a company such as Lloyds Bank.
When I was at the Birmingham meeting I met many small shareholders like myself. Many were in the position my father would have been in if he had 1: Not sold most of his shares and 2: Not died in July 2003! Many of these good honest retired folk had just lost most of their income and many were in tears!
But then such as Comrade Corbyn’s supporters don’t like to think of these people. They like to imagine private shareholders as the people they most despise. These people have the following identifying features:
1. They are mostly male.
2. They are “White British.”
3. They speak in a particular way, called marked Southern Received pronunciation. Think Jacob Rees-Mogg!
4. They were privately educated. – (Jacob Rees-Mogg)
5. They can trace their family history to the House of Plantagenet. – (Jacob Rees-Mogg?????)
6. They are so rich they do not need to work.
British Gazette readers will of course be aware that such people who meet all these features DO EXIST – but there are not many of them!
NB: Advice for the Honourable Member for North East Somerset (Jacob Rees-Mogg) – Sir, You appear to present a risk of heart attack to Comrade Corbyn. It might be an idea to keep a packet of aspirins on your person when in the House of Commons! Just in case!
Speaking the Truth unto the Nation
