The fire-sale flop: Gordon Brown’s plan to sell £16bn of assets sends pound plummeting
Posted by smeddum on October 13, 2009
By Tim Shipman
13th October 2009
There was a Gordon of Brown
Who sold gold when it was down
Right at the bottom
Now in the Autumn
He looks to sell the whole town (fromMaxKeiser.com)
The pound fell to its lowest level in six months last night on news of Gordon Brown’s £16billion asset sale to ease the growing national debt.
Sterling plunged after the Prime Minister announced the plan to sell central and local government assets over the next two years.
Yesterday’s announcement confirmed that the Tote bookmaker, Royal Mint, Met Office, Channel Tunnel rail link and student loans will all be hived off.
He hopes: Gordon Brown speaks about the economy in central London today. He announced a massive £16 billion sale of state assets
Mr Brown also said that he wanted to offload the Government’s one-third share in Urenco, a nuclear company that enriches uranium, and the Dartford Tunnel river crossing in Kent.
Government sources suggested ‘backroom’ civil service functions, such as IT and HR, could be sold off to private firms.
It will fuel speculation that Whitehall functions could be transferred overseas.
Sources said the sale of national assets will raise £3billion, while another £2billion will come from sales of land and property owned by Government departments.
This leaves £11billion to come from local government sales, raising fears that town halls could be forced to sell libraries, leisure centresand school playing fields.
Critics expressed concern that some of the assets already raised money for the Treasury through taxes and tolls – meaning their sale would see revenue tumble.
The Queen Elizabeth II bridge at the Dartford crossing. The Government is to stage a £16billion asset sell-off as part of moves to stabilise the public finances
Student Loans statements: The PM detailed an initial round of disposals that could raise £3billion over the next two years – including the Student Loan book
David Cameron said: ‘If you sell something it can help you in the short term, but it does not actually help you live within your means in the long term.’
The Tory leader added: ‘This is the Prime Minister who sold our gold reserves and if he’d sold them later he could have got four times the quantity.’
LibDem Treasury spokesman Vince Cable said the policy was ‘fundamentally flawed’.
Local Government Association chairman Margaret Eaton said it was ‘ disappointing’ that councils had not been consulted.
‘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,’ she said.
‘The proposals need to be fleshed out further. What sort of assets are councils being expected to sell? Does it include school playing fields, cemeteries or libraries?’
Chancellor Alistair Darling denied the move would be a ‘fire sale’.
Business Secretary Lord Mandelson told Radio 4’s Today programme that the sale aimed to reduce debt as an alternative to ‘savage cuts’ planned by the Tories.
In These New Times 
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