Gordon Brown's sell-off of public assets is too little too late.
The government is announcing a £16 billion sell-off of public assets. The include things like the Dartford Bridge, the student loan book, and the Tote – the UK state bookmaker.
Just on that point, we argued that the Tote should be sold off years ago. The government wanted to sell it cheap to a group of horseracing interests, a sale that ASI blocked by complaining to the European Commission – this is a business owned by the public, after all, not something in politicians' gift that they can transfer to a few rich, insider chums. After the EU had stopped all that, they could have auctioned the Tote and got a good price for it. Now, they will be lucky. Potential buyers like Ladbrookes are suffering in the recession.
I'm all in favour of privatization, and a recent ASI report by Nigel Hawkins identified £20 billion-worth. But this is the wrong time to sell public assets. Very few businesses, or even members of the public, have much cash to buy new businesses – especially badly-run state businesses which will need heavy investment to sort out. And everyone knows it's a fire sale – the government need the cash. Instead, the government should wait and sell these things when the time is right.
Gordon Brown sold the nation's gold reserves at a quarter of their value – they would have been worth billions at today's $1000-an-ounce price. He seems destined to sell things at the bottom of the market. He will be be lucky to get much of a price for the assets he is now grudgingly flogging off. And what's the point? That's the amount that the government overspends every month. Unless they cut spending, they will soon run out of assets to sell.