Taxpayer call over bank shares sale

Millions of taxpayers should be given the chance to profit from a no-risk stake in Royal Bank of Scotland or Lloyds, according to a think-tank.

Every voter would be given the opportunity to hold shares in the state-backed banks and take the profit on selling them while the original price of the stock would be returned to the Government, under the proposal by Policy Exchange. The think-tank said it would create a new generation of shareholders and allow the Government to dispose of its stakes in the banks before the 2015 general election and at a better price than with other options.%VIRTUAL-SkimlinksPromo%
RBS and Lloyds were bailed out during the financial crisis and the Government now owns 81% and 39% of the companies. Chancellor George Osborne is reportedly due to outline his plans for the disposal of Lloyds at his Mansion House speech to the City later this month.

Under the Policy Exchange scheme, £34 billion of the Government's total £48 billion stakes in the two banks would go into the hands of individual taxpayers. The plan would see all British residents aged over 18 with a National Insurance number and registered to vote - representing up to 48 million people - allowed to apply for shares worth up to £1,650.

The idea comes in a report, Privatisation of the Banks: Creating a new generation of shareholders, authored by James Barty, former global head of equity strategy at Deutsche Bank. Examining all options available to the Government, it concludes that a distribution of shares in both banks to taxpayers - to be repaid on sale - combined with a sell-off to investors and institutions, is the best solution.

It says that shares would be distributed to taxpayers who would be able to apply for them at no initial cost. They would be paid for at the time of sale. In the event of shares never exceeding an initial "floor price", they would return to the Government after 10 years, giving taxpayers confidence since there would be no downside or upfront cost.

The shares would be held in a special nominee account. Taxpayers could buy them for themselves by paying the Government the floor price. Those not wanting to manage the shares on day-to-day basis could choose an automated option, for example selling all their shares once the price had risen by 20%.

The report found flaws in other options to re-privatise the banks. It said a staged sale to institutions could not take place before the next election and shares would have to be sold at a discount.

A mass share sell-off along the lines of BT or British Gas would allow the Government to sell a bigger stake by getting retail investors involved but they would need to be tempted by a "sizeable discount". In addition, the cut would have to be offered to all EU citizens. Also, only wealthier taxpayers would have the means to participate in the share purchase.

Meanwhile a share giveaway, costing £50 billion, was described as a non-starter, especially as those receiving the stock would look to cash in by selling quickly, putting pressure on the share price.

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Taxpayer call over bank shares sale

More than 46,000 of 106,000 the complaints received by the FOS in the second half of last year related to payment protection insurance (PPI). And the organisation is expecting to receive a record 165,000 PPI complaints in 2012/2013.

The huge numbers are due to the PPI mis-selling scandal that should now be a thing of the past, but there is no doubt that the insurance, which can add thousands to the cost of a loan, is highly unpopular!

(Pictured: Martin Lewis after the PPI payout ruling)

Complaints about mortgages jumped by 38% in the last six months of last year, the FOS figures show, compared to an increase of just 5% in investment-related complaints.

Common gripes about mortgages include the exit penalties imposed should you want to sell up or change you mortgage before a fixed or discounted deal comes to an end, and the high arrangement fees charged by many lenders.

While there is nothing in the data released by the FOS about the number of complaints relating to savings accounts, hard-pressed savers have been struggling with low interest rates for several years now.

You can get up to 3.10% with Santander's easy-access eSaver account, but many older accounts are paying 1.00% or less and even this market-leading offer includes a 12-month bonus of 2.60% - meaning that the rate will plummet to just 0.50% after the first year.

Banks are imposing the highest authorised overdraft interest rates since records began, with today's borrowers paying an average of 19.47%, according to the Bank of England.

A typical Briton with an overdraft of £1,000 is therefore forking out around £200 in interest charges alone. Coupled with meagre returns on savings, it's enough to make your blood boil!

While authorised overdrafts may seem expensive, going into the red without permission will cost you even more due to huge penalty fees.

Barclays, for example, charges £8 (up to a maximum of £40 a day) each time that there is not enough money in your account to cover a payment.

If you need to send money abroad, the likelihood is that your bank will impose transfer charges - and offer you a poor rate of exchange. Someone transferring a five-figure sum could easily lose out by £500 or more as a result.

The good news, however, is that you can often get a better deal by using a currency specialist such as Moneycorp.

Automated telephone banking systems, not to mention call centres in far-flung parts of the world, are one of our top gripes - especially as we often encounter them when we are already calling to report a problem.

In the words of one disgruntled customer: "What is it about telephone banking that turns me into Victor Meldrew? Well, maybe it's the fourteen security questions, maybe it's the range of products that they try to push or maybe it's because I'm forced to listen to jazz funk at full volume while my phone bill soars.

"Actually though, I think it's because the people I eventually speak to rarely seem able to solve the issue I'm calling about."

The days of a personal relationship with your bank manager are long gone - for the huge majority of us at least.

When ethical Triodos Bank investigated recently why around 9 million Britons would not recommend their banks to a friend or relative, it found that almost a third felt they were not treated as individuals. Another 40%, meanwhile, were simply disappointed with the customer service they received.

When you're in a rush, the last thing you want to do is wait in a long queue at your local branch.

Researchers at consumer champion Which? recently found that most people get seen within 12 minutes, but you could have a much longer wait if you go in at a busy time. Frustrating stuff!

The Triodos Bank research also indicated that the bonus culture that ensured the bank's high-flying employees received large salaries, even when it was making a loss at the taxpayer's expense, was hugely unpopular with consumers.

About a quarter of those who would not recommend their current banks said this was the main reason why. And with RBS executives sharing a £785 million bonus pool despite the bank, which is 82% publicly owned, making a loss of £2 billion last year, it's not hard to see why.

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