They will include the Tote, Dartford crossing, the student loan book, the Channel Tunnel rail link and - having protected national security - the government's stake in URENCO.
Let's put that in perspective. The budget deficit in August was £16.1bn!
So these sales, to be announced tomorrow as Browns big idea will, once sold, cover one month's debt… what will he do to pay for September's?
71 comments:
Considering Osborne's plans in his big speech were put at £7bn, it covers considerably more than the Conservatives.
Spot on Iain
Will the funding come from the nationalised banks to pay for this - so they will be private really!!
Welcome to the surreal world of Gordon Brown
To be fair, the £16 billion includes fantasy asset sales by local authorities as well. The central government assets are only £3 billion.
So I think the Great Helmsperson has actually got us as far as about 8pm on August 5th.
Assuming the people on eBay pay up, obviously.
Ask the Blairs, John Prescott and Peter Mandelson to hand back all the money they've stolen over a decade of corruption and lies.
Ask the Blairs, John Prescott and Peter Mandelson to hand back all the money they've stolen over a decade of corruption and lies.
At least the Tories have never sold off any national assets.... oh..
So the man who sold our gold at rock bottom prices now wants to sell more of the family silver.
Iain, the real story should be about Labour incompetance, and why it has failed to dispose of these assets when the financial climate was rosier than it is now?
I've quickly checked the items slated for sale, and found reports of when Labour first announced their sale. The sale of the Tote was a Labour manifesto pledge in 2001. Urenco slated for sale in 2007, and the Dartford Crossing sale was announced earlier this year. Neither the BBC nor Sky News mention this in their reports.
PS Hope canvassing is going well in neighbouring Bracknell Forest.
And this ignores the fact that the Dartford Cossing, once paid for by the ongoing tolls raised, was to become FREE.
Thanks for another promise, Broon.
Alan Douglas
Precisely. Please pardon me for mixing my metaphors, but we have a lame duck government running around like a headless chicken. Eventually it will fall down. as dead as a dodo, and that day can't come soon enough.
Typical Brown timing, wait for the bottom of the market and then sell. This is the gold fiasco Mk II
Iain - note its all English assets and the ability to charge people who live in England thats being sold off.
Not the Fourth road bridge or future Govt. revenues from North Sea oil.
All this is a ruse to move debt off balance sheet. It still all has to be paid for in the future - with the exception of the land the govt plans to sell at the bottom of the market ( a Brown speciality ).
There is a straight con going on.
16 billion to reduce the 'deficit'
The ignorant think 'deficit' equals government debt.
The even more ignorant think government debt is 'Government bond borrowing'
That ignores state pension, state second pension, civil service pensions, PFI, government guarantees, nuclear decommissioning, ....
Iain
As a cheap crack, or a joke to be made while reviewing newspapers this will probably serve you fine.
But do you really believe governments should run balanced budgets during a recession?, as that is surely the premise of the joke.
On the broader debt scenario, I would recommend at least giving some thought to Samuel Brittan's evidence. (As a keen student of recent political history, you probably know, Brittan defended the Thatcher government in 1981 from the famous letter signed by 364 economists).
Chris Dillow showed conclusively that Osborne's claims about the markets are "questioning our resolve to deal with our debts" is clearly the opposite of the truth, though again one can see why the soundbite is used despite its sheer distance from the actualite.
Of course that should have been Forth road crossing - duh ( and I used to drive across it every day - and in those days you had to pay ! )
And yet Osborne's (dubious) claim last week that his policies would save 7bn is hailed as the second coming. Odd that.
And the timing... how to signal to the markets, just before they open, that you are (a) clueless, and (b) desperate.
Right. So the Dartford crossing, in England, a valuable asset because it levies tolls, is to be sold off to help pay for bailing out Scottish banks. Of course we can expect the Scots to make their contribution can't we? Perhaps the sale of the Forth and Skye bridges? Oh silly me, no tolls on them so no sale value. Why am I not surprised?
WV. Snoged, but it really should be shafted.
So it is a sort of post-Thatcher privatisation but with the bother of any due-diligence?
Run along the same lines as the gold sales? Wait until the market is rock-bottom and then flog it to the first foreigner to chance along?
I note that there is no mention of spending less. Just an idea of how to get more to keep spending.
The man's beyond contempt..
Has he got any gold to sell?
Had I known your mind then, Iain, I bet I would have read your critique of Mrs Thatcher's massive asset sales in the '80s . . .
http://www.ifs.org.uk/bns/bn26.pdf
The way Gordon's going, we'll soon be no better than Zimbabwe. He has, truly, lost the plot. Having flogged the UK gold reserves at a market low, he'll now sell land-based assets at a market low - if Labour remain in office for much longer, there'll be no assets left.
No doubt if Hans Christian Andersen were still alive, he'd be writing a new fairy tale.......'The Prime Minister's Fiscal Manoeuvres' - then Danny Kaye could sing it.
Sunder, Would you point me to where I have suggested there should be a balanced budget in a recession? Thought not.
Chris Dillow did no such thing. If you ever bothered to speak to people directly involved in the financial markets you would know that is exactly what many of them are thinking.
Jimmy, are you really so economically illiterate as not to understand the difference between a one off asset sale and ongoing cost savings? Clearly so.
Apparently, he's selling Mandy's watch which will cover the next two years.....
I hope it wasn't Osborne working out how much the sales will bring in, he may be millions out again.
@Quietzapple - Thatcher sold assets the state mismanaged and got more back in taxation of the newly privatised comapnies than the 100% prfits avialble before.
What Brown is selling is mostly the right to tax people for things they already own 9 a sort of off balance sheet PFI weaze) combined with his trade mark selling of assets at the bottom of the market.
All that for a few more days of the Brown fantasy government.
Labour can forget about any MPs they have in Kent and Essex.
At least when the Conservatives sold off our "assets", they offered them to the British public first - the fact the public then chose to satiate their own greed by selling on the shares is something the British public must accept responsibility for, not the Conservatives. This is nothing short of economic vandalism by Labour, another chapter in Gordon Brown's scorched earth policy document. We're being sold out.
Yes, ROTFL.
Crap time to sell of course, with all the markets for everything depressed. Be worth buying some shares in the Tote though if that's how they sell it - but I suspect that as with all things NuLab, these valuable state assets will be sold off cheap to dodgy cronies of Prince Mandleson et al.
Mind you, it's only what the Tories did, hugely undervaluing state properties such as railway land, defence property, the land mental hospitals were built on, etc, flogging them off cheap to all sorts of desperately unpleasant foreign tycoons and merchant banks and all presumably for piddling donations to Tory HQ.
Makes you proud to be British.
Iain
* My point was that that is precisely the premise of what you write in this post - literally "The budget deficit in August was £16.1bn! So these sales, to be announced tomorrow as Browns big idea will, once sold, cover one month's debt… what will he do to pay for September's?" ... The point can only be understood as having the premise is that the UK government must balance its *monthly* accounts, which would be as stringent a balanced budget test as it would be possible to devise.
If (however) you don't think it is necessary to balance the budget while in recession (whether monthly or otherwise), please explain more slowly what point you were trying to make when writing that.
(On Chris Dillow: since long-term glit prices have fallen, do you have some [non-anecdotal] evidence of market scepticism about UK debt finance, which Osborne directly claimed is already occuring, positing an inevitable rise in long-term interest rates, of which there is no sign at all).
For anyone above who claims that G.O.'s 7bn reduction was lesser than this 16bn one off sale, may I remind you that it would be 7bn now, 7bn+inflation next year etc etc. Get it?
Sunder, I assume the whole point of the piece is as summarised above. It won't touch the sides, does nothing to reduce our long term problems and the monthly figure given for illustration.
Not rocket science. You hark on like you're Columbo nailing a suspect with a loaded gun.
With mathematical precision Gordon Brown chooses the worst time in generations to dispose of capital assets. You don't sell things like this in the middle of a recession, then again you don't run a deficit in the middle of a boom either, so we shouldn't be surprised. Good news for the Chinese or the Arabs or whoever is cash-rich at the moment though. They get a bargain buying cheap assets that were built with British taxes. We get to watch the nation's infrastructure disposed of in a fire sale.
I'm pondering on just HOW Gordon Brown ever got the nickname of 'Prudence'........
Long term guilt prices falling may have something to do with a little thing called quantitative easing, or the Bank of England buying vast quantities of government debt and in effect sitting on them.
The test of what the rest of the bond market thinks is when QE stops in the near future.
Lord Elvis - the Tories often did not "offer them to the British public first" - many of the most profitable (for the super-privileged buyers) privatisations were of low-profile but immensely valuable assets like the British Railways Board and the land belonging to important local public institutions. These were often rushed through and virtually in secret. Massive, windfall, staggering profits were made and all with hardly a murmur and never a question of public share-purchase.
There is a new plan that the government has been working on here.
Gordon Brown's Postal gold youtube
English assets - of course.
And the Tories are meekly going along with it. For to speak out for England would put the Union at risk and McCameron wouldn't want to do that would he?
Sunder,
you seem to believe that their is a binary choice between running a deficit of 16bn a month, and having no deficit at all.
Iain's rhetorical point was entirely reasonable, given that the asset sales are not going to happen over a single month (if they happen at all).
As for glit (sic) prices, I suspect that yields owe rather more to the many billions of QE, and the belief that we will probably have a Tory government next year, than any confidence in the policies of the current administration.
In any event, it's not a market that we can rig forever.
The next government will have a golden opportunity to reduce the size of the public sector and reduce public expenditure all in the name of keeping down taxes and repaying debt.
Something good can come out of this mire we have been drooped in by Brown.
Oh dear, a few Labourists have poked their heads above the trenches tonight to defend an indefensible fire sale, the latest desperate move by the economic incompetent and auld fraud to stave off the national credit downgrade.
Iain must have hit a raw nerve. And none of them has answered his fair question: what's Brown got lined up for September? The motorways? The sell off a regiional city to an oligarch? Nottingham, perhaps. That should raise a few bob.
Brown will bankrupt the country and sell everything sellable before he gives up. The danger he therefore presents is only trumped by the massive scale of his arrogance and his stupidity.
The vast majority of the UK's population know it. Why don't the Katwalas of this world accept it now too? Brown is finished - and so is years of Labour mismanagement, misgovernence and corruption. Good riddance.
Oh boy! We shall see costs rise for motorists crossing at Dartford and the cost of Channell Tunnel fares, too.
Bet he'll cock it up, too.
Can't someone put him in a straight jacket now, please?
Man in a shed...
I doubt if you would get much for the Forth Road Bridge as it's being replaced soon. It's falling to pieces like most infrastructure in Scotland. Oh to have Norways energy reserves .
Thatcher sold off our essential utilities and now we pay the French and Germans for our energy. Hence our gas and electric charges are the highest in Europe.
Labour is just selling off what little is left of UK PLC after the Tories sold the best bits.
Iain, you miss the point. The gap is not going to be closed either by Gordon's asset sales or by Osborne's fuzzy math. As Sunder points out mainstream economic opinion is that we grow our way out of it. In the global scheme of things you are right to point out that the asset sales are neither here nor there, but the same goes for Osborne's numbers, even if they are recurring items.
Sunder, all the gilts are being bought by the Bank Of England, hoping that when times improve they can sell on British government debt to third parties.
The problem is that once the quantitative easing programme reaches the limits of toleration by overseas creditors,the current emergency measures could collapse, leaving Britain in a major economic crisis.
We need to re-build confidence by showing money is not being wasted, and business here has a future.
Last October the crisis was uncreditworthy banks. Next it could be uncreditworthy countries, who are bailing out the banks.
The endless underwriting of debts has to stop somewhere. The maintenance of confidence is crucial, and cannot be taken for granted.
Gordon shows his financial mastery yet again.
We are at the start of an age of austerity with the economy in a slump from which it will take years to recover and pay off the national debt. Many students (often with worthless degrees from faux universities because of this Government's policies) cannot find work. They have little prospect of work soon and certainly not the type of work needed to pay off their accumulated loans - loans they were forced to take out because Labour decided to under fund the Universities to give money to their other client groups.
So obviously this is just the time to sell off the student loan book - a book that now appears certain to be riddled with bad debts.
Then there is the fantasy £13bn from local authorities - we don't know what it is or where it is but we are gonna sell it now, roll up roll up!!!!
He must be in line for the Nobel Prize for Finance by now. After all he has broken the cycle. No more Boom then Bust.....now its Boom Bust Bust Bust Bust
He'll only get about 25% of the real value based on his track record as a super salesman and his efforts to single-handedly save the whole world.
Wot a wazzuck...
Sad, sad, sad
I was impressed with the honesty shown by the BBC Economics Editor last night who described it as short termist and not addressing the fundamental issues.
Which of course is true.
Interesting that Tory punters want the Tote in state hands . . .
Mrs T sold whatever she thought she could get away with to pay for the first of her recessions, period.
Close to giveaway in the case of BT. Ask the folk who worked there then.
Clear that it is better to sell these assets when the stock market has recovered some way. Some were calling for such sales when it was on the ground . . .
Why are you not approving some comments?
Note that Mandy made special reference to the Dartford Crossing this morning on Today - words to the effect of "why on earth should that belong to the state", etc.
(1) It should belong to the state because private operators have a long history of over-charging motorists for major toll crossings.
(2) No doubt Crown Prince Mandleson mentioned this specially because he has an extra special plan for it. A quick sale to one of Deripaskas' many offshoots perhaps?
It now seems clear that all of this is nothing at all to do with reducing the deficit. Instead, Mandy is simply being enabled to run the usual NuLab privatisation agenda, which is in all relevant ways identical to the right-wing Tory one of more and more privatisation, more and more profit and tax-avoidance for the super-rich, etc. Sod the economy - let's make some more cash for our pals whilst we're still in office!
Time for another yachting hol with a rich oligarch methinks.
UUntil Iran started dabbling with Uranium enrichment, this process was strictly controlled by four nations as was the know how of what technology was required for security reasons.
To actually contemplate selling the UK's stake in Urenco is sheer lunacy. Bin laden will think it is Christmas!
Fine as far as it goes - its just cash flow. No mention of historic cost against realisation value - eg profit or loss and no mention of dealing with the stuctured debt.
Some things never change.
@Quietzapple,
I don't think the main objection from Tories is about the principle of selling state industries into the private sector. Personally I think selling the Tote seems like a good idea. The issue is the timing. Most of the assets concerned are income-generators, and their sale will actually increase the monthly deficit in the future. The only effect on government finances would be short-term. The question is, what is the motive for announcing these sales now? I would suggest it is about improving the short term finances at the expense of the long term. Much like the "fiscal stimulus" (code: borrow billions and spoon feed the public so they don't realise how crap things are until next year). Is it too cynical to think that Labour expect to lose the GE next year and are pursuing a range of policies designed to a) mask the seriousness of our situation to save some of their seats and b) poison the well for the incoming Tory government.
The Student Loan Book and the Dartford Crossing are English assets.
Why doesn't Gordon Brown sell off some Scottish assets since it's Scottish banks that ran up most of the debt?
Why not sell off MP's second London homes acquired with ACA as well? We're all in the same boat after all.
Sorry chaps, the Dartford Toll has already increased by 50% to £1-50 - and this, naturally, was after it had paid for itself. Now Brown wants to flog it off, those that use it regularly will almost certainly see the price of transit rise to £2 per car in the very near future.
And the original agreement was that it should become free after it had been paid for, eh?
On 'Any Questions' on Friday, the Chief Whip, Nick Brown said that the would be "Unwise to sell anything the state owns" given the current state of the economy!!
16.20 mins in
http://www.bbc.co.uk/iplayer/episode/b00n3jxf/Any_Questions_09_10_2009/
Looked at the 2009 budget speech on the Treasury website at http://www.hm-treasury.gov.uk/bud_bud09_speech.htm which includes this paragraph:
"The Government has set itself a central goal of realising up to £16 billion of property and other asset sales in the three years from 2011-12, with proceeds raised being used for new capital investment."
Illustration (explains all!)
http://img381.imageshack.us/img381/6672/broonbutcher4.jpg
I thought the Dartford toll was supposed to be lifted once the construction costs had been covered?
The last time I passed through it it appeared to be causing an enormous traffic jam as drivers stopped to pay the toll.
Obviously if it's sold off the toll will continue - what do the Tories suggest we do to prevent this act of desperation by our unelected and discredited "Prime Minister"?
Surely Brown is increasing investment by minus sixteen billions. Just as well he prudently abolished Tory boom and bust otherwise we could be in real trouble.
Jimmy said:
"Iain, you miss the point. The gap is not going to be closed either by Gordon's asset sales or by Osborne's fuzzy math. As Sunder points out mainstream economic opinion is that we grow our way out of it. In the global scheme of things you are right to point out that the asset sales are neither here nor there, but the same goes for Osborne's numbers, even if they are recurring items.
October 12, 2009 12:23 AM"
More lying bollocks from the Labour trolls.
The consensus is that major reductions in public spending and some tax rises are urgently required.
The £90B estimate is the structural deficit, does that term mean anything at all to you ?
Going into an election promising the electorate that they can carry on as before, borrowing as much as they like, and with public expenditure rising continuously is not only criminal misrepresentation, but, sorry lads, has been well and truly rumbled by a large majority of the electorate.
Jimmy you say;
‘Sunder points out mainstream economic opinion is that we grow our way out of it. In the global scheme of things you are right’
This will be good news for my wife who has maxed out her credit cards, I will explain she can pay them off by ‘growth’.
If it’s good enough for the government to pay off £2,400,000,000,000 of national debt that way, then it is sure to work for her.
Why did Broon give a 'speech' to a bunch of hand picked yes men today and not give a speech in the Scottish Parliament Sotuh????.
"The consensus is that major reductions in public spending and some tax rises are urgently required."
Whose consensus exactly?
"This will be good news for my wife who has maxed out her credit cards, I will explain she can pay them off by ‘growth’."
Ah yes, the now standard (apparently) conservative argument that there is no difference between the principles involved in running a national economy and a household budget.
It's frightening to think what would have happened if the right had been in charge last year.
Do any of your trolls realise that the USA's debt is worse wrt their GDP, while France and Germany are only slightly better off than the UK?
Now looks like better timing than delay, the Treasury has its expertise and will want to slow the slide in the £.
The "Quietzapple" ubiquitous Labourist troll says: "...the Treasury has its expertise and will want to slow the slide in the £."
Oh! You've noticed the slide in the pound, then?
Wonders never cease.
Jimmy, national debts and deficit economies are not ‘Acts of God’ nor do they occur randomly in the natural world, they are deliberately constructed.
This government has set up a system of running the economy in deficit mode since 2001, that is ‘earn’ £3, ‘spend’ £4, principally to expand and support a gigantic public sector. This system continues to this day with the government borrowing about £50 million each day and continuing to grow the annual deficit and the accumulated national debt. In fact in Darling’s 2009 budget, deficit economies were planned through to 2012 (look it up).
In the first instance this system has to be dismantled, it would appear this government will do anything other than rein in the behemoth they have created, asset liquidation is a one off short term measure, and £3 billion here, £16 billion there, are drops in the Ocean.
Quietzapple - I hate to be the bearer of bad news, but there are lies, damn lies and official government statistics.
The 'official' national debt is given as about £800 billion, the 'true' debt conservatively estimated at three times that, if the 'off balance sheet' items are included.
http://www.financialadvice.co.uk/news/8/pensions/11151/UK-public-sector-pensions-more-expensive-than-US-counterparts.html
One item alone, the Public Sector Pensions Liability exceeds the national debt all by itself.
"Jimmy, national debts and deficit economies are not ‘Acts of God’ nor do they occur randomly in the natural world, they are deliberately constructed."
And you're telling me this because...?
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