Selling off the family silver: that was the accusation
against Margaret Thatcher, when Harold Macmillan
condemned her with resoundingly
“The sale of assets is common with individuals and the
state when they run into financial difficulties. First the Georgian silver
goes, and then all the nice furniture that used to be in the saloon. Then the
He ventured “to question the using of these huge sums as if
they were income.”
The wise old man warned in the
Lords: “Modern economists have decided there is no difference between capital
and income. I am not so sure.”
He recalled 1929, “when your Lordships had
friends, very good friends, who failed to make this distinction. For a few
years everything went well, and then at last the crash came, and they were
forced to retire to some dingy lodging-house in Boulogne.”
, you may remember, was once
claimed by David Cameron as his role model, back in his sunshine-in,
“compassionate Conservatism” days.
Cameron had a photo of Macmillan, not
Thatcher, on his desk. No longer.
For Cameron and George Osborne
are now selling off more silver at
knockdown prices than Thatcher ever considered.
She sold off state industries;
they are bent on shedding the fabric of the state itself – capital, boiled down
and poured into current income – as if there were no tomorrow.
large parts of the public realm will feel like that dingy Boulogne boarding
house. New analysis shows a record
£26.4bn was raised last year alone by state sales.
The Press Association lists
this fire sale: Royal Mail, Eurostar, Northern Rock and shares in RBS and
Lloyds were just the ones that made headlines (and though the chancellor today
halted the sale of the rest of the Lloyds shares, that’s just what it was: a
Already this year, 67 acres of King’s Cross land has been sold for
£371m. And London land is exceptionally precious – land the state will need but
can never regain.
Ahead lies the threatened sale of Channel 4, vengeful and
ideological – and much more.
“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,” says the Treasury.
The forced sale of state-owned
land is asset-stripping with a political purpose, matching Osborne’s target to
shrink the state to 35% of GDP by 2020.
Cameron says that’s permanent, so of
course they will sell the land it stands on, to stop it regrowing.
The closeness of this government
with private interests, the in-and-out revolving doors between ministers and
business (Labour ministers did that too), and the sweetheart tax deals revealed
over Google, make these sales at too-low prices doubly suspect.
ineptitude, naivety or venality is to blame, the taxpayer rarely comes well out
of these selloffs.
The NHS, councils, defence and
other departments are being instructed to shed land and to switch the proceeds
to plug current deficits.
The NHS faces a £2.5bn shortfall this year, “or
perhaps north of that”, the NHS Improvement head told the public accounts
Using sales proceeds may help a
bit this year, but it does nothing to solve next year, or future funding when
every scrap of land has gone.
Schools, clinics, care homes and other services
will be needed, with a growing population, more children and more old people.
But Osborne’s legacy means nowhere to build.
The assault on socially owned
housing and land forces councils and housing associations to sell, using the
money for current spending.
That stops borrowing against current property to
build new: they want no new social housing for rent.
That’s a win-win for
Osborne and Cameron: they get money in to make it look as if deficit and debt
are reducing while withdrawing the state from housing altogether.
The desperate need for housing of
every kind is ignored as land is squandered, sold to developers, much of it in
high-value areas, sold to be mothballed by foreign investors using homes as
NHS privatisations continue: VirginCare took over Kent
community services this month, one of many such moves.
But less visibly, the
NHS has been instructed to make capital-to-revenue transfers as “accounting
adjustments” before April to bring the apparent debt down, according to the Health
Shabby public buildings and
services will have their repair and refurbishment capital budgets taken to ease
the look of current accounts – short-term and synthetic accounting.
talks piously of reducing debt and deficit so as not to burden future
generations, but instead he burdens them with a squalid, under-resourced public
sector with debts in kind, such as Labour inherited in 1997 – schools with
leaking roofs and outside toilets, hospital wards in war-time Nissen huts.
Failure to invest in people and skills, with deep cuts to
further education colleges, is another way of diminishing national capital, as
today the UK Commission for Employment and Skills says the shortage leaves one
in four skilled jobs unfilled for lack of trained candidates in manufacturing,
electricity, gas, water, construction and transport.
Employers fear the 3m
promised apprenticeships will be of low quality.
Already there is a grave shortage of people willing and able to become
headteachers and heads of NHS trusts.
University College London Hospital, a
national flagship, is just one example: it has had to abandon its search and
implore its current head to stay longer.
Sometimes this government
over-reaches, forced to correct itself – on tax credits, or last night again in
the Lords, with a small concession on one benefit.
But the course is set, and
it is not often diverted. Asset sales are an integral part of its long-term