Osborne plans £32bn ‘sale of the century’
CHANCELLOR George Osborne will privatise public assets this year worth more than the last two decades of sell-offs combined, new analysis showed yesterday.
The “sale of the century” of the public’s stakes in Royal Mail, RBS and other organisations is likely to generate around £31.8 billion for the Exchequer in 2015/16.
This just pips the £31.7bn raised by all privatisations since 1993, a Press Association report revealed, and would also be the largest sum raised through the disposal of public assets in any 12-month period in modern history.
But general union Unite general secretary Len McCluskey accused Mr Osborne of rewarding the “Tory Party’s friends in the City” in spectacular and lavish style.
“These are public assets belonging to the taxpayer, held in trust for the future for the benefit of the many, not for the financial gain of a rich City elite,” said Mr McCluskey.
“George Osborne is being utterly irresponsible and inconsistent.“On the one hand he announces £12bn of cuts, the pain of which will be felt by the most vulnerable. On the other he rushes through the RBS sale and in the process loses out on a £14bn return to taxpayers.
“This is money that could have been spent on infrastructure investment, education and health for the benefit of all.”
Mr Osborne began his programme of sell-offs this week when he authorised the sale of £2.1bn-worth of shares in RBS.
Further sales are planned for the next few months, including the people’s remaining 30 per cent stake in Royal Mail, estimated to raise £1.5bn, and shares in Lloyds Bank totalling around £12.9bn.
The privatisation of £2.3bn in student loans, along with assets from the former bank Northern Rock and other sales, would bring the total for 2015-16 to £31.8bn.
The privatisation return of £31.8bn for 2015-16 is roughly one-fifth of the total amount raised by all privatisations between 1979 and 2014 (£151bn).
The previous 12-month record was set in 1991, when proceeds from the sale of public stakes in British Telecom, National Power, PowerGen and regional electricity companies in Scotland raised £22.5bn.
Selling the remaining public shares in Lloyds, estimated to bring in £12.9bn this year, would be the single biggest privatisation since the sale of British Gas in 1986, which raised £20.3bn.
Nigel Lawson is the chancellor who raised the most money by privatisation, selling off around £73bn of public assets between 1983 and 1989. Other chancellors to have made a large number of sales include Norman Lamont (around £24bn) and Ken Clarke (£23bn).
During the Labour governments of 1997-2010, £6.4bn of public assets were sold, including the partial sell-off of National Air Traffic Services in 2001 and British Nuclear Fuels between 2006-9.
* All figures are at today’s prices, calculated using RPI inflation by PA