George Osborne is set to sell off more public assets than every privatisation of the past two decades combined.
In what has been dubbed the “Great British Sell-Off”, the chancellor is set to flog off public owned stakes in Royal Mail, RBS and other organisations – raking in a one-off windfall of around £31.7 billion in 2016/17.
This is more than the total of £31.7 billion raised by all privatisations since 1993. It would also be the largest amount of money raised through the disposal of public assets in any 12-month period in modern history.
Unite general secretary Len McCluskey described the findings as “the sale of the century” and accused Mr Osborne of “rewarding the Tory party’s friends in the city in a spectacularly lavish style”.
He said: “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.
“George Osborne is being utterly irresponsible and inconsistent. On the one hand he announces £12 billion 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 £14 billion return to taxpayers.
“This is money that could have been spent on infrastructure investment, education and health for the benefit of all.”
TaxPayers’ Alliance chief executive Jonathan Isaby called the statistics “striking”, and stressed the Treasury should not use sell-offs as a substitute for planned spending cuts.
“It is welcome that the Treasury is looking to maximise revenues to fill Britain’s financial black hole, but sell-offs can’t be allowed to replace the spending reductions that Britain needs over the long-term.
“Every deal must deliver the best possible value for money for taxpayers, but it is good to see that an active chancellor is pushing ahead with selling off assets that can sit very happily – and typically operate more efficiently – in the private sector.
“He should look at every bit of government and, where sales of organisations, assets or land are appropriate, push on. People often say we should keep these assets for a rainy day – a £1.5 trillion and growing debt burden counts as a downpour.”
Mr Osborne began his programme of sell-offs this week when he authorised the disposal of £2.1 billion of shares in RBS.
Further sales are planned for the next few months, including the Government’s remaining 30% stake in Royal Mail, estimated to raise £1.5 billion, and shares in Lloyds totalling around £12.9 billion. The privatisation of £2.3 billion of student loans, along with assets from the former bank Northern Rock and other sales, would bring the total for 2015/16 to £31.8 billion.
The Press Association’s analysis also reveals that:
- The figure of £31.8 billion for 2015/16 is roughly one fifth of the total amount raised by all privatisations from 1979 to 2014 (£151 billion).
- The previous 12-month record was set in 1991, when proceeds from the sale of government stakes in BT, National Power, PowerGen and regional electricity companies in Scotland raised £22.5 billion.
- The sale of the Government’s remaining shares in Lloyds, estimated to bring in £12.9 billion this year, would be the single biggest privatisation since the sale of British Gas in 1986, which raised £20.3 billion.
- Nigel Lawson is the chancellor who raised the most money through privatisations, selling off around £73 billion of public assets between 1983 and 1989. Other chancellors to have presided over a large number of sell-offs include Norman Lamont (around £24 billion) and Ken Clarke (£23 billion).
- During the Labour governments of 1997–2010, only £6.4 billion of public assets were sold, including National Air Traffic Services in 2001 and British Nuclear Fuels Limited from 2006–9. Note: all figures are today’s prices, calculated using RPI.