Comment: Brussels has scuppered free RBS shares for all

It is common knowledge that the Treasury is considering such a plan to reward taxpayers for RBS’s £45 billion taxpayer bailout.

But the word is that the European Commission (EC) is looking askance at such a move. Brussels has the power to effectively put the block on, or at least complicate, such a move. Under European single market rules, the shares would have to be offered to everyone in Europe, including non-Britons who did not contribute to RBS’s rescue.

That would almost certainly be unacceptable to the UK government and the bank itself. An impasse looms. In fact, RBS is thought not to be madly keen on such a discounted or free sale of shares full stop.

The group’s senior management would prefer a less demotic privatisation, one based more on the natural fruition of chief executive Stephen Hester’s five-year turnaround programme at RBS that would command a good stock market appetite for the shares.

Group chairman Sir Philip Hampton indirectly alluded to the logistical challenges earlier this year of a re-privatised entity – with British Gas or BT levels of private investor ownership – having to hire football stadium-like venues to hold shareholder meetings. The prospect did not appear to fill him with unbridled anticipation.

You can see why the idea of a shares bonanza for the wider public would appeal to the government. The taxpayer is still in the hole for a lot of money on the RBS rescue, hence the outpourings of vitriol whenever the issue of bonuses arises.

An indirect “present” for taxpayers would help alleviate the pain, and be something of a public relations victory for the government, not least if it was timed conveniently in the year or so before the 2015 general election.

Labour would no doubt accuse the Tories and Liberals of electoral bribes, but now it seems Brussels may render the matter academic by citing the single market rules.

Of course, if EC competition commissioner Joaquin Almunia, insists on playing hardball on the issue, that is hardly likely to repair frazzled relations with Britain’s right-wing caucus, in particular. But that’s another story.

Cala ‘flotation’ option hardly a surprise

The new private equity owner of Cala says that the Scottish housebuilder will probably go public again in four years time.

Handy to know, but it would be very surprising if Patron Capital, which led the takeover of the company that had been owned by Bank of Scotland since the recent housing crash, said much different.

Any longer timeframe, or none at all, would imply Patron, aided by Legal & General in the takeover, doubted its ability to turn Cala around.

Three to five years is the traditional template for private equity to sharpen up the performance of an acquired business, even if only from the behind the scenes, and get its investment back alongside a decent “turn”.

Cala was undoubtedly hamstrung in its time in bank ownership. It will help its prospects that it now has entrepreneurial money behind it, as well as the drive and risk-taking that is associated with private equity.

The group is also likely to benefit from a recovering housing market over the next few years.