Tax-free zone
SO NOW, which will be the first company to offer Sid a bond? All that is missing is retail distribution. Imagine an ICI bond with a two-figure yield, offered in £500 units, without fuss, across the counter from every branch of Barclays. Mounted police would be needed to control the queues. Companies would have to find ways of stopping the registrars from spoiling a good thing by charging too much for administer- ing it. The simplest way would be to cut them out and issue bearer bonds — very popular in Belgium. Or Barclays could open an ICI Bond Account — holding the bonds as custodian, debiting ICI with the interest payments and passing them on to the customers. Or bonds could be sold through regular savings schemes, as invest- ment trust shares already are. The idea behind Sid was that he should be an owner, with a direct stake in the fortunes of his chosen companies. A bondholder is an owner, too, and his chosen companies are,
in the exact sense, under obligations to him. Treasury ministers ought to be cheering him on. They could very well give him, what they already give shareholders, a modest tax-free zone — Personal Bond Plans to go alongside the Personal Equity Plans. Better still, have one tax regime, based on PEPs, for all long-term savings (as Bill Robinson, the Chancellor's adviser, has suggested) and let bonds take their place in it. Bond- holders are good for business, and business can be good for bondholders. Ask your Bel- gian dentist.
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