Brown plans £16bn assets sell-off

By Alex Stevenson and Ian Dunt

The government plans to raise £16 billion to help pay off the public debt by selling off non-financial assets, Gordon Brown has said.

The Tote, the Dartford Crossing and the student loan book are among the assets which will form part of the portfolio to be sold off to help reduce the public debt.

Mr Brown told a group of economic commentators in London the sale forms part of a much larger programme of sell-offs to the private sector applying to what Downing Street calls “non-core government business”.

He was later attacked in the Commons, on its first day back after the summer break, for not announcing the decision to parliament first.

Comment: The dishonesty of asset sales

Vince Cable, Liberal Democrat Treasury spokesman described the idea as “a car boot sale” and “crass politicking at its worst”. He said there were “big questions about the timing and content” of the sales.

Chief secretary to the Treasury, Liam Byrne, said sales would only be made “when market conditions were right”.

“We have made tough choices to cut debt in the past,” he told MPs.

“We will not flinch now from tough choices in order to allow us to live within our means.”

Philip Hammond, shadow chief secretary to the Treasury, mocked the announcement.

“Can he tell me why anyone should believe a word they say on asset sales when they’ve announced each and every one of these before?” He asked Mr Byrne.

The government’s stake in enriched uranium manufacturer URENCO and the channel tunnel rail link are among the assets made available in the initial assets sale, which will raise around £3 billion within two years.

Surplus real estate owned by departments and agencies will raise further cash, while “new forms of public service companies” will be considered working in partnership with the private sector.

The government’s wider aim is to halve Britain’s deficit over the next four years. The £16 billion of planned sales comes in addition to the £30 billion to be raised in the Lyons report.

“We also need a deficit reduction plan that supports growth and jobs not one that snuffs out recovery before it has started,” Mr Brown said.

“A vital contributor to sustainable public finances is growth. 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.”

Much of the £16 billion will be raised by assets sold by councils. Downing Street said the assets to be sold – on a voluntary basis – included council housing, business parks and industrial estates.

Local authorities would keep the proceeds, the prime minister’s spokesman explained, and these would then be “noted off” in their relationship with the national government.

The Local Government Association reacted with hostility to the proposals, however.

“Local government will dispose of assets if they are not required but, given the current financial climate, this is not a good time to sell,” Margaret Eaton said.

“It needs to be local councils working with local people deciding when, or if, there is a right time to sell assets.

“If a council does not believe that a specific asset should be sold, how do we avoid protracted legal wrangling that would cost the taxpayer money?”