8 December 2010
Chancellor George Osborne has come under pressure to reveal how much money the government hopes to generate through asset sales during the Comprehensive Spending Review period.
Questioned by the Commons Treasury select committee this morning, Osborne declined to say how much of the income raised through sell-offs would be ring-fenced for specific projects and how much would be used to pay off the national debt.
He said: ‘I’m not sure I do have a figure because it is so dependent on whether we can achieve some of the bank share disposals, which is inherently dependent on the stability of the banking market.’
However, he also refused to give details of how much the Treasury thought it could raise through other sales, such as the student loan book and the Tote.
Osborne said he was ‘not relying’ on asset sales to cut the deficit.
However, committee chair Andrew Tyrie suggested that the tight departmental expenditure limits outlined in the CSR would be supplemented by cash from asset sales, which he said would be worth ‘tens of billions’ of pounds.
He said: ‘My best guess is that you’re going to find yourself not wanting to hypothecate it, in which case you’re going to have quite a bit in your back pocket as the years go by.’
Proceeds would go to a number of purposes, Osborne said, such as capitalising the government’s planned Green Investment Bank.
But the chancellor would not give estimates for how much of the cash would be reserved for specific purposes. ‘I’m not wedded to all proceeds from asset sales or privatisation going into deficit reduction. That doesn’t mean I’ve hypothecated particular projects or particular sums.’
He added: ‘Just because I’m open to discussion does not mean
it’s open season.’
Tyrie said some asset sale estimates were published at the time of the June Budget. But, he described the published data as ‘double Dutch’ and ‘a wonderful piece of opaque accounting’. He said he had not been able to work out how much the sell-offs would bring in.
Osborne promised to submit a full breakdown of the non-bank asset sales, and what would be done with the money.