Jeff Salway: Tell Sid to steer well clear of any plan to sell state bank shares

DO YOU remember where you were on 21 November, 1986? I doubtless spent most of it staring out of a classroom window at a wintry South Wales day and wondering what the teacher was blathering on about.

If you’re really unfortunate, you were listening to that week’s number one single, Take my Breath Away, the theme tune to the movie Top Gun. Or there’s a chance that you were doing something more constructive by making your first foray into the stock market.

Of the 1.5 million people who took up the government’s offer to buy shares in British Gas – courtesy of the famous Tell Sid campaign launched 25 years ago this week – hundreds of thousands were putting their money at the mercy of markets for the first time. And for investors at least (energy customers may see it differently) British Gas was the most successful of that era’s controversial privatisations.

Some, most notably Railtrack and British Airways, failed to deliver for investors, but 100 British Gas shares bought at flotation for £135 would now be worth almost £1,700, according to brokers SimplyStockbroking.

Those who have held on to their shares have done well out of the Tell Sid advertising campaign, which triggered huge interest in the shares. In that sense, it took the appetite for personal investing to a new level.

But did it really make such a big long-term impact? Share ownership levels have tumbled in recent years, partly because many people – especially those holding only individual shares and not a diversified mix of investments – have had their fingers badly burned in market crashes.

It’s also clear that many people bought just a handful of the shares and eventually forgot about them. Earlier this year Centrica, now owner of British Gas, wrote to nearly 30,000 people telling them they were due windfalls averaging out at £820 each. That followed a previous campaign uniting more than 10,000 investors with share windfalls.

The Tell Sid campaign sparked a brief frenzy, but private share ownership didn’t take off to the extent predicted by many back then. The coalition has raised the prospect of a similar approach to the sale of Royal Bank of Scotland and Lloyds Banking Group shares, but as it stands now you’d have to “Tell Sid to steer well clear”.

I know you’re still wondering what was number one after Take my Breath Away. It was The Final Countdown, by Europe. You might be hearing about that again over the coming weeks.

AS YOUTH unemployment continues to soar – having now hit the one million mark – talk of a lost generation no longer seems so hyperbolic. However its meaning still seems to bypass the government overseeing this national tragedy.

For all the crocodile tears, the coalition – which has scrapped the Future Jobs Fund – seems capable of getting hot under the collar only when the interests of the City need defending.

Never mind the millions of people paying the price for the reckless behaviour of a City left a long leash by the regulators, Chancellor George Osborne clearly knows where his loyalties lie.

As unemployment figures rose again last week and the eurozone continued to flirt with disaster, Osborne diverted his energies into attacking plans for a financial transaction tax.

To recap, the FTT (dubbed the Robin Hood tax) would levy a minimum 0.1 per cent charge on the trading of shares and bonds and 0.01 per cent on derivatives, where at least one of the parties in the transaction is EU-based. The aim is not only to raise revenues but also to reduce short-term volatility by reining in speculative investing. Pitfalls have to be addressed, but support is widespread.

Undeterred, Osborne hit out at the proposal with a vigour sadly absent from his stewardship of the economy. Yet his main argument – that a European version of the FTT would hurt the City by forcing banks to relocate to centres including New York and Hong Kong – is based on the flimsiest of evidence.

He also warned of the FTT’s impact on UK economic growth – breathtakingly arrogant from the VAT-raising Chancellor who has killed growth stone dead.

If we ever need a reminder of where this government’s priorities lie, Osborne – who ignores calls to repeat the previous administration’s bank bonus tax – makes it quite clear.

He refuses to take responsibility for his failed economic policies or for the national shame that is youth unemployment at one million, yet he has no trouble finding the will to fight the City’s battles for it.

• Jeff Salway is Personal Finance editor of The Scotsman