If we accept that returning the taxpayer's stake in Lloyds to the private sector is preferable to government presence in the banking system, and the temptation that it creates for politicians to interfere therein, the question is how to do it. The easy option, as regarded by government and the bank's management, is to sell the shares to institutional investors chunk by chunk when the price is right.
But former chancellor George Osborne wanted to add another approach, having already booked a profit from this initial drip-feed of shares into the market. This was to offer retail investors the opportunity to buy the shares at a discount to the market price, favouring smaller investors, as well as a bonus share offered for every 10 held for a year (up to a cap).
Maggie, I shouldn't have tried
Economic policy is partly about deciding who benefits and at whose expense. In this case, the discount and the bonus share would have meant taxpayers in general would lose out given the discount that is being provided to the market price. A smaller group of taxpayers, the participants in the share sale, stand to gain. Why accept the trade-off?
Votes and good publicity are two good reasons, with a national campaign set to remind of the 'Tell Sid' campaign before the privatisation of British Gas in 1986. The numbers are significant: a quarter of a million people had registered interest in the Lloyds share offer by October 2015. It also would offer an opportunity to prove government had learnt the lessons of the Royal Mail flotation two years before.
The Thatcher privatisations were part of a grand retreat from state ownership of the major industries in an economy that had been centralised during and shortly following the Second World War. It delivered short-term gains as national assets were sold off.
But it was also about entrenching a notion of capitalism, encouraging private ownership of property and industry. "Popular capitalism is nothing less than a crusade to enfranchise the many in the economic life of the nation," prime minister Margaret Thatcher told the Tory faithful at the party's 1986 conference. "We Conservatives are returning power to the people."
Some of the people, at least - and just how much power is questionable. The economic revolution of the 1980s undoubtedly promoted private ownership of property, via Right to Buy, and of industry. But many individual shareholders find that power is frustrated by a system of share ownership that denies them rights and votes. The real power to influence rests with a company's lenders and its institutional shareholders.
Middle grounded
We have previously mentioned Theresa May's promise to go beyond platitudes about 'stakeholder societies'. Cancelling a public share sale in one of the UK's major retail banks certainly wastes an opportunity to further her predecessor's vision of popular capitalism, but when it comes to economics Mrs May does not share Mrs Thatcher's extremes. It could be that the Lloyds move is simply about avoiding a worse headline, with the Treasury not keen to stomach a discount in addition to the loss it looks to make on part of the taxpayer's stake.
But it does seem that on the centre ground, popular capitalism has been replaced by the pursuit of 'responsible' capitalism. Our current government apparently believes that more ground can be gained through governance reforms such as putting workers and consumers on company boards - if that ever happens - than by gratifying and enlarging the private investor community.
