UK News

Insights from the UK and beyond

from The Great Debate UK:

Do you want shares in RBS and Lloyds?

By Matt Scuffham, UK Banking Correspondent.

The government should hand most of its shares in Royal Bank of Scotland and Lloyds Banking Group to the public, an influential political think tank says, in what would be the country's biggest privatisation.

The proposal would enable 48 million taxpayers to apply for shares at no initial cost and with no risk attached, the think tank said. A 'floor price' would be set and taxpayers would make a profit on any rise in the shares above that level.

But the think tank estimates only 20 to 30 million people would apply for the shares with many thinking it would require too much time and effort, despite applicants only needing to supply their name, address and national insurance number.

Taxpayers would receive shares worth between £1,100 and £1,650 depending on how many people take up the offer.

from The Great Debate UK:

How will the privatisation of RBS and Lloyds affect gilt supply?

--Sam Hill is UK Fixed Income Strategist at RBC Capital Markets. The opinions expressed are his own.--

The return of RBS and Lloyds to the private sector is moving up the agenda but as the UK government prepares to set out the strategy for privatisation, the spotlight will, once again, fall on the gilt market and the public finances.

from The Great Debate UK:

Thanks, Greece

--Laurence Copeland is a professor of finance at Cardiff University Business School. The opinions expressed are his own.--

The euro zone crisis has been a piece of luck for Britain. Imagine what would have happened without it.

from Hugo Dixon:

UK should get on front foot with City

It is perhaps too much to expect Britain’s Conservative-led government to lead any initiatives on Europe, such is the orgy of self-destruction in the party over whether the UK should stay in the European Union. But, insofar as David Cameron manages to get some respite from the madness, he should launch a strategy to enhance the City of London as Europe’s financial centre.

Britain has in recent years been playing a defensive game in response to the barrage of misguided financial rules from Brussels. It now needs to get on the front foot and sell the City as part of the solution to Europe’s problems. The opportunity is huge both for Britain and the rest of Europe.

from Mark Leonard:

UK Independence Party renews culture wars

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Over the past week, Britain has been shaken by a political earthquake. The previously marginal UK Independence Party (UKIP) burst onto center stage to capture almost a quarter of the votes in local elections around the country, threatening to upset the stable two-party system that has existed for the last century. Nigel Farage ‑ the Claret-quaffing, cigar-smoking former city trader who leads the party ‑ breathed life into abstract ideas of sovereignty by highlighting the inability of European Union member states to control their borders. He predicted “hordes” of Bulgarian and Romanian citizens legally migrating to the UK. The mainstream parties are struggling to respond.

UKIP is just a small part of a broader phenomenon spreading across the developed world that resembles a political backlash against globalization and interdependence.

from Thinking Global:

Is Europe losing faith in the EU?

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A wall of photos of European Union citizens outside the EU Commission building during the celebration for the Council of Europe in Brussels May 4, 2013. REUTERS/Yves Herman

Happy Europe Day!

If you don’t know May 9 is Europe Day, then you find yourself in good company with a majority of Europeans. Even in the most buoyant time, this holiday – marking the Schuman Schuman Declaration, presented by French Foreign Minister Robert Schuman in 1950, that launched the European Coal and Steel Community – doesn’t come with the transcontinental fireworks of America’s July 4.

from The Great Debate:

Europe’s fight to save its bees

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Bees hover around a flower in Lompoc, California October 1, 2011. REUTERS/Lucy Nicholson

Last Monday, the European Union banned the most commonly used pesticide group in the world, the neonicotinoids – neonics for short. The ban is set for two years and may be extended.

from John Lloyd:

The nuance behind the iron

There’s no time more apt for murmuring the ending of Brutus’s speech in Julius Caesar than the week of Margaret Thatcher’s funeral: “The evil men do lives after them/the good is oft interred with their bones.” No time better, either, to add that the “evil” that, in this case one woman, did is little examined by her detractors, who prefer to stick to a diabolical version of her 12-year rule.

Margaret Thatcher (narrowly) won the 1979 election because the Labour government of the 1970s, under Prime Ministers Harold Wilson and James Callaghan, had unsuccessfully tried to make a contract with the trade unions. In such a contract, pay would have been calibrated to productivity, and increases would be low in order to bring down high rates of inflation and to keep up investment in the socialized education, health and welfare institutions that disproportionately benefited the lower classes. It was the kind of social deal that the Germans and the Scandinavians had and still – in part – have: one that produces economies that, not by chance, have escaped the worst of the economic buffeting of the past five years.

from The Great Debate:

Thatcher: Master of the ‘unexpecteds’

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The passing of Margaret Thatcher comes at a time when the great theme that shaped her years as Britain’s prime minister – the frontier between government and the private sector – is again the focus of serious public debate. Her historic achievement was to widen the frontiers of the “market” and, as she said, to have “rolled back the frontiers of the state.”

There is, however, a pendulum in this relationship between government and private sector. The role of government in the economy has expanded greatly since the 2008 financial collapse, along with government debt. So we will likely again see a struggle to rebalance the respective realms of state and market. And it will again be a battle.

from The Great Debate:

Margaret Thatcher, an enlarger of British freedom

My immediate and lasting  memory of Mrs. Thatcher -- Maggie as we called her -- is sitting next to her in the late sixties at a dinner table as she scorched a bunch of City of London financial types. I was astonished. She wasn't yet the Iron Lady. She wasn't  in government. Labour was in power. She was  an obscure back bench Conservative MP, elected only in 1959, noticed in those sexist days (has much changed?) as much for her hats and aggressive hair style as for  her passionate defence of grammar schools under threat of closure from Labour.

What she did with the City of London men  was later characterised as a  "hand-bagging." A black Asprey bag she always carried was metaphorically wielded against people she saw as standing in the way of the greatness of Britain as Boudica, the leader of a British tribe, wielded a lance against the Roman occupiers. I suppose that as a new national editor (of The Sunday Times), and with normal male presumption , I had expected to lead the questioning of the ten or so big names and the table. I didn't stand a chance. Maggie pounded and pummeled them all by herself for an hour. I can't pretend this is verbatim but it went something like this: "All you people are interested in is moving paper around, making money not things. What are you doing for British industry? When are you going to help business stand up to  the unions?"  They murmured, they shuffled, they were outclassed. British elections -- six weeks to  a vote and no paid television ads -- have never been as corrupted by money as much as American, so she was not turning off a potential source of funding as an American candidate would fear to do. Still these were  men -- all men of course  -- who were influential and articulate and used to reverence not rebuke.

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