Gordon Kerr explains the futility of the Government’s planned asset fire sale.
The Government plans “a fire sale of assets worth £16 billion” to raise funds for our national coffers. All of the assets mooted -– the Tote, the Dartford Crossing, the Channel Tunnel rail link –- generate cash. In normal market conditions, they would be highly valued by the private sector. But these are not normal market conditions and, even if they were, the sale would be absurd.
Since these assets all generate cash, there is no net gain to the public purse from selling them. When their cash yield is greater than the interest cost of Government debt, the public purse is better off holding them than selling them to pay off debt.
More importantly, the sales are likely to be only partial. Recent experience has shown that the Government cannot bring itself to allow major infrastructure companies to fail. If Dartford Crossing plc teetered on the brink of collapse, the government would almost certainly support it but that which the private sector produces better than the public sector should be in wholly private hands, free of all taxpayer-backed guarantees.
Lenders to these “privatised” businesses would benefit from at least an implicit government guarantee. The government will be selling the upside of investing in the assets to the private sector whilst underwriting the bulk of the risk.
This amounts to selling assets to oneself, while giving away free money.
I am a supporter of your government however i do not agree with this in any way.
I was going to help campaign but if you go down this root i will vote for the oppositing.
You are now selling our whole country away
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