By Matthew Robertson
Gordon Brown, has proposed several solutions to reducing the rising budget deficit by raising £16bn from the sale of assets.
Brown’s intention is the auction and sale of a “portfolio of non-financial assets” held by Whitehall and local authorities over two years.
During his speech on the economy, the prime minister outlined sales which may raise £3bn, including the Tote, Dartford crossing and the student loan book. And his opposition MP’s have been quick to criticise his plans as they suggest that he will have to do much more if he hopes to be successful in his attempt to cut public spending and turn things around during this economic slump.
According to Downing Street, the sale marks the beginning of a radical assessment of what other non-core government business activities can best be done by, or in partnership with, the private sector.
Aides added that although these actions are important, a crucial force for the reduction in debt will be the restoration of strong, sustainable growth within the economy.
In April, Chancellor Alistair Darling forecast that public borrowing would reach a record £175bn over the next two years.
The funds raised will help finance new capital investment and pay down debt, Mr Brown said.
The initial offering will also include the Channel Tunnel rail link.
The government’s 33% stake in Urenco, a European consortium which supplies equipment to enrich uranium for the nuclear industry, will be offered but the PM will insist there will be no threat to national security.
The government will also look to sell surplus real estate which is part of the £220bn owned by its departments and agencies, as another way to generate income in their attempt to re-coop capital.
From the Conservative’s viewpoint the sale is “probably necessary” but “no substitute for a long-term plan”.
Leader David Cameron said: “Obviously we do need to do this, but we must make sure – as every family knows – if you sell something it can help you in the short-term, but it doesn’t actually help you live within your means in the long-term.
“So, we’ve still got to get to grips with public spending, get to grips with the deficit – and we must make sure we get good value for money”.
Liberal Democrat Treasury spokesman Vince Cable felt that there was a fundamental flaw within the policy and that the government would struggle to raise the required funds as they would be dealing in depressed markets which wouldn’t be entirely prosperous.
He said: “What worries me about the government proposal is that they’re proposing to sell off in very depressed markets, under very depressed markets for land and for shares.”
With the economy struggling, it appears that the government, lead by a defiant Gordon Brown, will leave no stone unturned in their attempts to raise the necessary, and crucial funds to get this country back to the way it was.