UK in $25bn sale of state assets

Gordon Brown says sale will include Channel Tunnel link as he bids to cut mounting debts.

Brown's speech included a series of attacks on opposition Conservative Party policies [EPA]
Brown's speech included a series of attacks on opposition Conservative Party policies [EPA]

“We have listed a number of assets that we are determined over the next period of time to put into the market place.

“That includes the student loan book, the Channel Tunnel rail link, that includes Urenco – subject to security issues being addressed – and that also includes the Tote [bookmaker], other facilities, and [a] property portfolio.”

Bank bailout

Britain’s public finances have been under significant pressure following an expensive bailout of its troubled banking sector.

My labrador, the UK’s debt and Gordon Brown
By Samah El-Shahat in The Business Blog

The public deficit is widely forecast to strike $275bn this year as the nation’s finances also take the strain of reduced taxation revenues.

The opposition Conservative Party, who are well ahead in opinion polls ahead of a general election due by June, set out their plans last week for tackling Britain’s debt problem.

In his speech, Brown, who is bidding to reclaim the economic initiative for his governing Labour Party speech, included a series of attacks on Conservative policies.

The prime minister said: “Our deficit reduction plan is deepening, it is far-ranging, it takes account of the issues.

“The difference between it, and those of other parties … is that deficit reduction can happen in a way that does not lead to a deterioration in front-line public services, and make sure that we have the investment that is necessary for the long-term growth of the economy.”

Opposition response

Reacting to Brown’s announcement, David Cameron, the Conservative leader, supported the sale but said the government must get value for money.

Cameron said of the sale ‘we must make sure we get good value for money’

“Obviously we do need to do this but we must make sure, as every family knows, if you sell something it can help in the short term but it does not help you live within your spending in the long term.

“We have still got to get to grips with public spending, get to grips with the deficit.

“We must make sure we get good value for money.”

In a twin-pronged attack on the UK’s recession, the Bank of England (BoE) has slashed British interest rates to a record low of 0.5  per cent and launched a radical quantitative easing (QE) programme to boost lending.

On Monday, an independent economics consultancy forecast that the British central bank woukd keep its key lending rate at 0.5 per cent until at least 2011 as the economy recovers.

The Centre for Economics and Business Research said that borrowing costs would remain below two per cent up until 2014.

The BoE has so far pumped $275bn of new money into the economy under QE, whereby it creates funds by buying bonds from commercial institutions.

Source: News Agencies


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