George Osborne signals massive UK asset sell-off

Chancellor George Osborne. Picture: Getty Images
Chancellor George Osborne. Picture: Getty Images
Share this article
7
Have your say

GEORGE Osborne has signalled one of the biggest sell-offs of public assets since Margaret Thatcher’s government in a major speech to business leaders where he has outlined how he intends to bring the budget into surplus.

Addressing the CBI, the Chancellor also said that he had ordered “unprotected” Whitehall departments including the Home Office and Ministry of Defence to come up with plans for severe cuts as he attempts to balance the books by 2017.

But his biggest announcement was the merger of two bodies that currently manage most of the taxpayer stakes in businesses across the economy – the Shareholder Executive (ShEx) and UK Financial Investments (UKFI), which has owned shares in the Royal Bank of Scotland (RBS) and Lloyds since the 2008 banking collapse.

He said that the new company, UK General Investments (UKGI), will make it easier for government experts to work together in order to deliver a key part of the government’s long-term plan and prepare for a sell-off of a wide range of public assets in a way that secures good value for money for taxpayers.

These will include sale of shares in Lloyds Banking Group, Eurostar and the pre-2012 income-contingent repayment student loan book, but not the RBS shares, with the bank still struggling to recover. He said: “If we want a more productive economy, let’s get the government out of the business of owning great chunks of our banking system – and indeed other assets that should be in the private 
sector.

“To help that happen, I can tell you that we’re merging UK Financial Investments and the Shareholder Executive into one organisation, to return government investments back to the private sector.”

He also revealed that he has already ordered unprotected Whitehall departments to find deep cuts.

Mr Osborne has signalled that his next Budget in July will include measures to make savings of £12 billion from welfare on top of other departmental savings.

He told business leaders: “To provide the best start, our new Chief Secretary, Greg Hands, is today asking government departments to identify further savings that can be made in this financial year.

“We’ve achieved underspends in previous years; we can do so again this year.

“When it comes to saving money, we all know that the more you can do early, the smoother the ride. And without fixing the public finances so our country lives within its means, there can be no economic security for businesses or working people.”

But Mr Osborne also wanted to outline his ambition to make the UK “the most prosperous country in the world” and also end the productivity gap between British and German and US workers.

He said: “Let me be clear: improving the productivity of our country is the route to raising standards of living for everyone in this country.

“So by the Budget I will publish our Productivity Plan, our plan to make Britain work better. Our future prosperity depends on it.”

He went on: “It is now within our grasp to make Britain the most prosperous country in the world, and the best place to do business.

“It would be very easy at the beginning of a second term to take our foot off the pedal. That’s not what we’re going to do. I want Britain to find that extra gear.”

He also said he wants to start a new building programme, warning that the UK’s physical infrastructure is “not good enough”.