Yesterday I wrote about the scope to save billions on the capital budget. A few wrote in to say it was not enough. Of course it isn’t enough. I am writing another series of pieces on the actions a new government could take to get us out of huge deficit. Just read it day by day to build up the full picture of the billions needed to plug the gap.
Today we need to think about what assets we could sell – things the state owns that would be better owned by private individuals and companies. Selling assets off brings three benefits. Firstly, the state gets a receipt. In the next couple of years, whilst we are waiting for the benefits of efficiency gains, changed policies, staff freezes and pay freezes to come through, we need some help from asset sales. Secondly, selling the silver back to the family often will lead to it being better looked after and run. Thirdly, the state will start to benefit from more rax revenue once trading enterprises are returned to private hands and more profit is made.
We should start by selling the banks. Substantial sums can be raised from selling Northern Rock, RBS and Lloyds shares. First we need to restructure them, to create more competing banks to improve the flow of finance in the UK economy and the cut the risk of too large to fail. We may not make a profit ovcerall after allowing for the insurance of dodgy loans and the other aid granted, but current conditions are ideal for banks to make profits and this will enable the government to get better proceeds for the sharesales and the better results come through in the market.
We should move on to selling the Student Loan portfolio, whilst protecting the repayment terms. The government could sell Railtrack, offer the Queen Elizabeth Conference Centre, sell more surplus land and buildings from the central estates, and sell the minority shareholdings in companies Labour has already started to privatise.
Promoted by Christine Hill on behalf of John Redwood, both of 30 Rose Street Wokingham RG40 1XU