Gordon Brown has just announced that he is going to sell off ~£16bn of state-owned assets, such as Tote and the Student Loan Book to plug his spending gap. Reluctantly, the Conservatives and to a lesser extent the LibDems have agreed that this is necessary.
In old money, £16bn, was a lot of money. It still is, but in the Alice In Wonderland world in which we live, we should not forget that for August 2009, the budget deficit was £16.1bn.
This means that Gordon Brown’s sale will only raise enough money to pay off 1 month’s borrowing.
He says this is to stave off cuts, but how can that work with such a “small” amount of money? He is still blind (sorry - no personal attack intended there) to the need for large scale structural reform.
There’s a second issue here - who says he will raise £16bn and what is the opportunity cost of the sale?
My mind is cast back to his criminal sale of our gold reserves when prices where 25% of what they are now. That’s right, they have risen 400% since he sold our gold.
Therefore the basis of his £16bn valuation will be interesting. After all, in the free market, a buyer knows when a seller is desperate, so will certainly be trying to negotiate a bargain.
Let’s not mince words here - Gordon Brown is being forced to sell off assets at rock-bottom prices because he knows he is running out of financial options.
His scorched earth policy towards this country and its finances is now beyond a joke.
So George Osborn’s plan to save £13 Billion by raising the state pension age, assuming he hasn’t got his figures wrong as reported in the Guardian, won’t even write off a month’s worth of deficit?
Er, no. One is a one-off revenue-raising measure and the other is an annualised ongoing saving.
One is designed to avoid any cutting at all and the other is part of a wider package to reduce spending.
But apart from that, you’re bang on!
Only as part of a package going up to 2015 though, surely? I thought they were looking at the full package of measures of roughly £7 billion a year.
So this £16 billion, if as you rightly say is achieved, would account for two whole years of the full package from Osborne?
No. I don’t get your numbers. Please itemise, as you don’t seem to have included Ken Clarke’s savings in there.
Besides, Osborne said first thing in his speech that his wasn’t a budget - we can’t do ours until after Labour have done theirs in the spring, can we?
Do you have a list of Nick Clegg’s “savage cuts” yet? Frankly, if they’re any good, I’m happy to review them.