Government sell-off of public assets in 2015 the biggest in UK history

A total of £26.4 billion was made through privatisations, beating by almost £6 million the previous record set in 1987, according to new analysis by the Press Association.

The sell-offs included the Government’s remaining 30% stake in Royal Mail, 5% of the Royal Bank of Scotland and more than 11 billion shares in Lloyds.

Responding to the findings, a Treasury spokesman said: “Central to our plan to fix the public finances is the sale of Government assets to help pay down the national debt and ensure economic security for working people.

“That’s why we’ve set an ambitious target to sell £5 billion worth of assets by 2020, which will put us on track to meet our target.”

Shadow business secretary Angela Eagle accused Chancellor George Osborne of “touring China selling off any British asset he could lay his hands on to the Chinese state bank”.

She added: “Osborne will only meet his debt target by selling off public assets which explains why the Tories are flogging off the family silver at record pace.”

The Press Association’s analysis shows that almost half of the record-breaking £26.4 billion came from the sale of mortgages previously owned by Northern Rock, which brought in around £13 billion.

More than £1 billion was raised by the sale of the Government’s remaining shares in Royal Mail, while a further £800 million came from the sale of a 40% stake in Eurostar.

Welcoming the figures, TaxPayers’ Alliance chief executive Jonathan Isaby said: “Ministers are absolutely right to have identified assets to be sold off. Where shares, buildings or land no longer need to be in Government hands, their sale can help ease the burden on already hard-pressed taxpayers.”

TUC general secretary Frances O’Grady said the privatisations had “nothing to do with providing economic security”.

“Eurostar and Royal Mail were both sold for well under value,” she continued. “Flogging them off for short-term political gain is short-changing taxpayers.”

In 1987 the privatisation of British Airways, Rolls-Royce and other public assets raised a combined total of £20.7 billion in today’s prices: a record that remained unbeaten until 2015.

Chief economist at IHS Global Insight Howard Archer said the bumper sell-offs in 2015 had been helped by “largely favourable market conditions” during much of the year.

“Current financial market turmoil and uncertainty could slow and delay further privatisation plans,” he added.

Some £2 billion of shares in Lloyds are due to go on sale to the public later this year. The privatisation of Channel 4 has also been rumoured, with David Cameron saying it is right to “look at all the options” over the future of the publicly-owned TV network.

The first sell-off of 2016 has already taken place. The Government announced on January 22 that it had sold its stake in a 67-acre redevelopment site near King’s Cross station in London, raising £371 million.

Transport Minister Robert Goodwill hailed the sell-off as “an excellent example of how we are reducing the deficit and delivering lasting economic security for working people”.

Unite general secretary Len McCluskey described the findings as evidence of the government’s “categorical refusal to consider that investment, not cuts, is the way to secure the economy”.

He added: “Ministers suggesting that everything is better off in private hands simply insult the public’s intelligence. Tell that to fed-up customers who have had to endure the twin abuses of higher costs and poorer service when big business gets its hands on public services like the railways.

“This fire sale is aimed at plugging the financial holes in Chancellor George Osborne’s illiterate economic policy characterised by faltering growth and increased borrowing costs.

Mick Cash, general secretary of the Rail, Maritime and Transport union, also criticised the sell-offs.

“Britain will pay dearly for knocking out our services and strategic assets to the same old spivs and chancers who have destroyed our railways and utlities in the name of private greed,” he said.
Howard Archer, chief economist at IHS Global Insight, told the Press Association: “Given the still weakened state of public finances, the government has certainly been looking to the sale of assets to help get public debt to start falling as a proportion of GDP.

“Largely favourable market conditions during much of 2015 helped this process.

“Obviously, current financial market turmoil and uncertainty could slow and delay further privatisation plans.”

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Here is a full list of what the Government sold off in 2015, together with the money raised:

Constructionline – £35 million

In January the Government sold the Constructionline business to Capita. This database contains details of more than 23,000 companies in the construction sector and provides a verified list of suppliers who have passed industry checks.

Greencoat UK Wind – £51.2 million

In February the Government sold its entire 50 million shareholding in this fund, which was set up to encourage investment in UK wind farms.

Eurostar – £757.1 million

The Government sold its entire 40% stake in Eurostar in March. The successful bidder was a consortium comprising the Canadian pension fund Caisse dedepot et placement du Quebec, and Hermes Infrastructure.

MPs on the House of Commons Public Accounts Committee recently criticised this sale for being “significantly less” than the estimated expenditure by taxpayers of £3 billion, and of “further evidence” of assets being undervalued.

Royal Mail – £1.3 billion

The Government’s remaining 30% stake in Royal Mail was sold off in two stages in 2015. The first sell-off, in June, raised £750 million. A further £591.1 million was raised in October.

Royal Bank of Scotland – £2.1 billion

A 5.4% stake in RBS was sold off in August. This reduced the Government’s overall stake in the bank from approximately 78.3% to 72.9%. The sale proceeds of £2.1 billion were a third below the price the Government originally paid, representing a loss of around £1.07 billion.

Northern Rock mortgage assets – £13 billion

In November the Government sold these assets to affiliates of Cerberus Capital Management LP. The Government has now sold off more than 85% of Northern Rock, which it nationalised in 2008.

Lloyds – at least £9.1 billion

A total of 11.2 billion Government shares in Lloyds were sold between December 17 2014 and December 3 2015. They were sold at an average price of greater than 81p per share, raising at least £9.1 billion. According to the latest figures, the Treasury still owns approximately 6.6 billion ordinary shares in Lloyds.

All figures have been compiled by the Press Association using data from UK Financial Investments Ltd and the Shareholder Executive: the bodies responsible for managing the Government’s portfolio of publicly-owned assets.