BRITISH PRIME minister Gordon Brown’s plans, announced yesterday, to sell off billions worth of state assets to reduce the United Kingdom’s rapidly growing public debt have run into strong opposition. There have also been suggestions that some of the assets will not find buyers.
In a speech in London, Mr Brown said the Tote betting chain, the London-Paris high-speed rail-line and the Dartford road tunnel near London could raise £3 billion, while the sale of local authority-owned land could raise £13 billion more.
The British government has previously attempted to sell off some of the assets, and suffered a major blow two years ago when a determined effort to offload the Tote collapsed.
However, Mr Brown indicated that yesterday’s list, which includes the government’s 32 per cent stake in the nuclear reprocessing company Urenco, could be added to significantly in future if Labour is re-elected in next year’s election.
Defending the plan, business secretary Peter Mandelson said: “Of course we’re not going to sell at the bottom of the market when selling the assets is going to barely realise any of the value of them. Of course we’re not going to do that. We’re not idiots.”
While a spokesman for Irish bookmaker Paddy Power said it would “on principle rule nothing out”, it is unlikely that the company would be interested in the Tote – and certainly not if it was sold in one piece.
Unlike its UK competitors Paddy Power has approximately £80 million in the bank, while Corals, Ladbrokes and Hills have all had to either raise new capital or reschedule loans. Private equity buyers are also thought unlikely to be interested.
Increasingly, betting chains are moving their businesses online, while many of the Tote shops are “down-market and not well-positioned”, according to one industry source, and buyers would be concerned about taking on board existing leaseholds.
Britain’s largest rail union, the RMT, promised to lead a public campaign to block the Channel rail-link sale, pointing out that the majority of the British public now oppose rail privatisation.
The Automobile Association equally opposed the sale of the Dartford bridge and tunnel crossing of the Thames, which was paid for by tolls that should have come to an end in 2002, but did not.
Local authorities objected to being forced to sell lands, warning that “this is not a good time to sell” and that, in any event, local authorities – not Whitehall – should be the ones to decide what is sold and when.
Margaret Eaton, chairman of the Local Government Association, said: “As a matter of routine councils sell off unwanted assets but always make sure that they get the best value for money for the local taxpayer.
“What sort of assets are councils being expected to sell? Does it include school playing fields, cemeteries or libraries? 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?” she asked.
Tory leader David Cameron said Mr Brown’s plans would do little to ease the UK’s growing public deficit, which will exceed £175 billion this year alone – 12 per cent of gross national product.
“Obviously we do need to do this but we must make sure, as every family knows, if you sell something it can help in the short term but it does not help you live within your spending in the long term.
“We must make sure we get good value for money; this is the prime minister who sold our gold reserves and if he had sold them later would have got four times the quantity. Let’s not have any more incompetence from him,” he said.