Government Assets

Part of the debate – in the House of Lords at 6:01 pm on 12th October 2009.

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Photo of Lord Newby Lord Newby Spokesperson for the Treasury 6:01 pm, 12th October 2009

My Lords, when the House reconvened last October, the first day started with an emergency Statement by the Minister on the action that the Government had taken that day in recapitalising the banks. Within the first 10 days of coming back there had been three emergency Statements about the scale of the banking crisis. This year, we start by picking up the pieces. In the intervening period, the Government—and the Prime Minister in particular—have been dragged, kicking and screaming, to accept that there will have to be substantial reductions in public expenditure and increases in taxes and revenue. We have had, as it were, a very unseemly dance of the seven veils, conducted by the Prime Minister, of which this is the latest and smallest veil. As the noble Baroness, Lady Noakes, has pointed out, the Statement—all bar one sentence—was contained in the Budget. We knew, and it is in the figures, that £16 billion is expected from asset sales. The Prime Minister says that today they have set out a few details; the very few details are contained in a single sentence which just lists some of the items that the Government will sell from their own central portfolio.

I do not want to repeat everything that the noble Baroness has said about the individual items, although I cannot help at least making a feeble joke about there having been more false starts in selling the Tote than in the Grand National on a bad day. This is a relatively small, unconvincing list of national asset sales. The local government asset sales are, of course, much more substantial than those that are expected to come from national government. We have this wonderful statement:

"We know that councils will make a major contribution".

The only reason that the Government know this is because they have just told councils that they have to make a major contribution. Councils have not been asked whether they want to make a major contribution. At the moment, many councils are extremely worried about what the consequences of the announcement mean for them. Some £13 billion equates to £20 million per parliamentary constituency, so there are a number of £20 million dollops per local authority. If I am running a local authority, what does that mean in terms of what I have to flog off and when?

When we come to the two sentences about timing, we find across the piece a very considerable degree of muddle. These three elements are expected to deliver £16 billion over the period 2011-14. That is straightforward, except for this:

"In particular, we aim to secure receipts from central government sales within the next two financial years"— that is, 2010-11—

"where market conditions are right".

I think it is the general view that market conditions are unlikely to be right in respect of virtually any of these categories of asset, and certainly property, within the next two years. If I had been a senior civil servant or Minister receiving this from a civil servant, in view of the timing I would have said, "Go back and make it clear". Could the Minister clarify the timing? This is a mouse of an announcement. It will do nothing to deal with the structural deficit and is yet another unedifying example of the Prime Minister attempting desperately to appear in control of the situation and public expenditure, which he manifestly is not.