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LTU Supports Fight To Save Dividends
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Date: 20th Oct 2008
Since the announcement of the terms of the deal that led to the part nationalisation of Lloyds TSB the number of calls, letters and emails we have received from members concerned that a dividend freeze for the next five years is going to seriously reduce their standards of living is without precedent.
In cases we dealt with last week, pensioner members emphasised that their twice-yearly dividend payments help them cover their important household and hospital bills. Equally, there are many staff in the Bank who rely on their dividend payments to supplement their basic salaries. For retired members of staff they rely on such dividends to supplement their retirement income. We accept that taxpayers should be fully compensated for bailing out the Bank but the 12% fixed return on the £1 billion of preference shares owned by the Government in Lloyds TSB is ample enough compensation.
Lloyds TSB is a dividend stock and most staff past and present will have held onto their shares for the simple reason that over the years dividend payments have been extremely good and staff, rightly or wrongly, have got used to those payments. In the absence of those payments for the next 5 years many small shareholders, including thousands of retired staff, will suffer real hardship, at a time when the UK economy is on the brink of a recession, the likes of which we have not seen for a generation. In those circumstances it is important that more rather than less money is poured into the economy.
Mark Brown, Assistant General Secretary, said “LTU believes that small shareholders in Lloyds TSB should be allowed to receive their twice-yearly cash dividend payments on up to 100,000 shares. This would cover the vast majority of staff shareholdings completely and almost all others very substantially”.
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