Eurostar stake for sale to pay for big spend on infrastructure
Royal Mint won't be sold, says Danny Alexander, but Channel 4 and Met Office could be privatised
THE government’s 40 per cent stake in Eurostar is to be sold off, Danny Alexander, Chief Secretary to the Treasury, confirmed today as part a pre-election boost for the economy.
Alexander, appearing on Radio 4's Today programme, said the government was doubling its target for assets sales to £20bn between 2014 and 2020.
The money raised will help towards a massive national infrastructure plan (NIP) totalling £375bn of investment in energy, transport, communications and water projects to be unveiled later today in Parliament.
The NIP includes plans by the insurance industry to invest £25bn over the next five years.
Alexander's pledge was met with immediate scepticism. When he described the infrastructure schemes as a "pipeline" of government projects, Today presenter Sarah Montague suggested some would more likely call them a "pipedream".
She was referring to an in-depth analysis of the government’s existing infrastructure programme by the Financial Times on Monday which showed only a "handful" of 40 priority projects listed in 2011 had actually been completed.
Nevertheless, Alexander's list of projects includes a £50 million redevelopment of the railway station at Gatwick and upgrading the A14 to the Suffolk port of Felixstowe, although this will be achieved without making it a toll-road following protests from Tory MPs.
As for the sale of state assets, Alexander ruled out adding the Royal Mint or Companies House – the regulator for companies – to the list for potential privatisation.
However, assets which could be sold include the government’s stake in the two bailed-out banks, RBS and Lloyds, the rail infrastructure company Network Rail, Channel 4 TV, the Met Office and the Ordnance Survey.
The sell-offs raise echoes of the criticism by the late Harold Macmillan of Mrs Thatcher’s privatisations as "selling off the family silver". But Alexander defended the sales, saying: “We are raising our ambition in terms of corporate asset sales. It’s right that government should do that.
"Government shouldn’t own that it doesn’t need to own particularly when those resources can be reinvested in productive infrastructure.”
The asset sales and NIP are part of the Treasury move to clear the decks for the Chancellor’s Autumn Statement tomorrow.
The Treasury has been heavily briefing some of its plans – including capping business rates, and cutting subsidies to on-shore windfarms which have been heavily criticised by Tory MPs – in a bid to regain the initiative from Labour leader Ed Miliband, who has effectively set the economic agenda this autumn since making his pledge to freeze energy prices if Labour win the 2015 election.
Meanwhile, David Cameron sought to damp down expectations of a pre-Christmas give-away by the Chancellor by briefing journalists on his trip to China (he is returning in time for the Chancellor’s statement) that middle income earners will have to wait until the end of the decade for tax cuts.
Cameron is indicating that after slashing 5p off the top rate of tax to 45p in the £ for the highest earners, the focus will now be on the hard-pressed low-earners who attracted to Miliband’s cost of living campaign.
The main message tomorrow will be that the economy is recovering faster than the government’s critics believed possible, and voters should not put all the hard work and austerity at risk by switching to Labour. ·