UK for sale - £16bn sale of assets

[DVTimes]

http://news.bbc.co.uk/1/hi/uk_politics/8301787.stm

Gordon Brown is to announce the sale of £16bn worth of assets by the government in a bid to shore up public finances.

The prime minister will give details of initial sales which could raise £3bn - including the Tote, the Dartford crossing and the student loan book.

He will announce the sale in a speech on Monday as an alternative to immediate cuts proposed by the Tories.

The Conservatives said the sale was "probably necessary" but "no substitute for a long-term plan".

Mr Brown will say premature cuts risk "snuffing out" the economic recovery when the job of fixing the global economy is only half done.

The plan is to sell a "portfolio of non-financial assets" held by Whitehall and local authorities over the next two years.

They will include the Tote bookmakers, Dartford crossing, the student loan book, the Channel Tunnel rail link and - having protected national security - the government's stake in Urenco.

This is a European uranium consortium, in which the government has a 33% stake. It supplies equipment to enrich uranium for the nuclear industry.

The government will also sell surplus real estate which is part of the £220bn owned by its departments and agencies.

"We need a deficit reduction plan that supports growth and jobs not one that snuffs out recovery before it has started," the prime minister will say.

"Restoring public finance sustainability must be done in a way that supports growth not destroys it. The failure to do so is the real risk of a lost decade of austerity."

The funds raised will help finance new capital investment and pay down debt, Mr Brown will say.

In April, Chancellor Alistair Darling forecast that public borrowing this year would reach a record £175bn over the next two years.

A Conservative Party spokesman said: "As any family knows selling off things helps in the short-term and, given the state the country is in, is probably necessary but it is no substitute for a long-term plan to get the country to live within its means."

The Liberal Democrat Treasury spokesman, Vince Cable, said the policy was fundamentally flawed.

He said: "Part of the problem here is that a lot of the family silver's already been sold. There isn't very much left, I mean the last government had massive disposal of assets and there's only a little bit, there are a few offerings left.

"What worries me about the government proposal is that they're proposing to sell off in very depressed markets, under very depressed markets for land and for shares.

"The student loan book is a slightly easier thing because it's government backed, but they're going to get very distressed prices. This is not a good time to sell assets."

Number 10 said the sale marks the beginning of a radical assessment of what other non-core government business activities can best be done by, or in partnership with, the private sector.

However Downing Street added that although these actions are important, a vital force for debt reduction will be the restoration of strong, sustainable growth within the economy.