By Francis Elliott and Emily Gosden (November 26, 2008)
Published in the The Times here
Lock-keepers’ cottages, assorted forests, a conference centre, military radio frequencies and a uranium enrichment company – the sale to help to plug Britain’s £1 trillion deficit is now open.
Buried in the Pre-Budget Report is a list of state-owned assets with “potential for alternative business models”.
Treasury ministers rejected claims that the privatisation drive amounted to a firesale that would leave taxpayers short-changed. “This is about preparing assets for market where that is appropriate. If it doesn’t make sense to sell, we won’t,” said one yesterday.
Included in the list are bodies that have eluded previous attempts at privatisation, such as the Royal Mint, the Tote, Ordnance Survey and the Met Office. Other organisations freshly offered to the markets include the Oil & Pipeline Agency, which manages a 1,500-mile (2,400km) network of underground fuel distribution pipelines and 46 storage depots. Around half the network – built to supply the military in an emergency – is mothballed.
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More prosaically, bidders are sought to help the Government to realise its “long-term objective of disengagement” from the Covent Garden Market Authority. The Queen Elizabeth II Conference Centre in Central London is up for sale, as is British Waterways’ “canalside property portfolio”. The Forestry Commission has been told to consider what it can sell.
The prospect of squeezing extra cash out of the Dartford Crossing is raised in the Pre-Budget Report’s so-called Red Book, as is the exploration of “options for the commercialisation of other transport assets”, a phrase that will send a shudder through toll-weary motorists.
One asset with the potential to realise billions of pounds is the state’s 33.3 per cent stake in Urenco, a uranium enrichment company.
The man chosen to manage the sell-off is Gerry Grimstone, a former Treasury mandarin, who will reveal next spring how much he believes can be raised. Officials emphasised that an outright sale was only being considered for some organisations. Others, such as the Met Office and Ordnance Survey, will be helped to exploit commercial opportunities, they said.
Even advocates of privatisation said that taxpayers could lose out if assets were sold now. Nigel Hawkins, of the Adam Smith Institute, said that the Government would, for example, be “very hard pressed” to achieve the £500 million valuation put on the portfolio of British Waterways this year.
Matthew Elliott, the chief executive of the TaxPayers’ Alliance, said: “It is great news that the Government is looking to offload assets that unnecessarily burden the public. It is of the utmost importance, however, that the timing and structure of these sales provides the best possible deal for taxpayers. The last thing the country needs now is a repeat of Gordon Brown’s disastrous bargain-priced sale of British gold reserves.”
Dai Hudd, deputy general secretary of the public sector union Prospect, said: “Any attempt to sell them off now would be economic madness. It would be a case of sell in haste, repent at leisure. The Government will face the justifiable anger of taxpayers if they see these national assets sold at bargain-basement prices.”