Cable and Russell quiz Byrne on asset sales

6.27.00pm BST (GMT +0100) Wed 14th Oct 2009

• [Oct ] Vincent Cable: THANK you, Mr. Speaker, for calling this urgent question. It is Parliament's first day back, and we have seen old habits - this national car boot sale was announced in the media yesterday evening, with a major speech by the Prime Minister and no statement to Parliament.

I have no objection to the principle of asset sales, which are an important part of managing the public finances. However, there are big questions about timing and content. Can the Chief Secretary first confirm the Treasury's own figures that the net worth of Government has declined from 70 per cent. of GDP in the late 1980s, before the big privatisation, to nil today and will decline to a minus figure in 2013? That means that if the Government were to sell off the whole of what remains of the public sector, they would have to pay somebody to carry it away.

On the substance of the Chief Secretary's answer, he said that there would be £16 billion of sales. Is it not true that £13 billion of that will be from local authorities and that, as he confirmed to me in a discussion on the radio at lunch time, there is no pressure on local authorities to make those disposals and they will be free to invest the money raised? In that case, how will the sales narrow the Government budget deficit, if at all?

Can the Chief Secretary explain why the Government were in favour of privatising the Tote in 2008, then announced in the Budget this year that it would be kept in the public sector in the medium term, but now say that it is to be privatised again? The Tote has had more false starts than any race in history.

On the timing of this announcement, the Government have a terrible record in selling public assets, with the history of gold sales and the sale of QinetiQ, which was condemned by the National Audit Office. There is now a proposal to sell land, in a market in which development land is at about 15 to 20 per cent. of its peak value. Is that not an absolute guarantee that the Government will not get value for money, and that this announcement has been driven entirely by political concerns?

Liam Byrne (Chief Secretary, HM Treasury; Birmingham, Hodge Hill, Labour)

I am grateful to the hon. Gentleman for the question and for his renewed interest. I know that that is completely unrelated to his own difficulties to do with tuition fees and mansion taxes at his party conference recently.

Let me be absolutely clear about the substantive question that the hon. Gentleman poses, because it is important and there will be wide interest in all parts of the House about our strategy. As I said in my statement, in the Budget, the Chancellor set out the ambition to sell about £16 billion of assets over the period 2011 to 2014. About £11 billion of those assets will, of course, be local authority assets. That is based on a long-term picture of what local government tends to sell each year. Over the past 20 years, local authorities have raised something like £3.7 billion a year, and of course they are free to keep those receipts and reinvest them in priorities such as affordable housing and schools.

In addition, we anticipate that something like £2 billion of central Government property can be sold and reinvested by Departments. We believe that additional business and financial assets can also be sold, such as those that the Prime Minister listed, and that something like £3 billion can be raised from them over the next couple of years. Of course, that money will be available to pay down debt.

• . . Bob Russell (Colchester, Liberal Democrat): Will the Minister confirm that his brief fails to alert him to the common sense of hon. Members on both sides of the Chamber relating to the funding and history of the building of the two tunnels under the Thames and the Thames bridge? It was intended that they would be paid for and then made free. In a spirit of joined-up government, will he confirm that the Department for Transport is at this very moment looking at proposals that could lead to the removal of the tolls altogether?

Liam Byrne: The Department for Transport has to look at a whole range of scenarios for the years to come, not least whether another crossing is put over the Thames. That is why I said that the ambition over the next couple of years-the next two financial years-is to raise something of the order of £3 billion from the disposal of central Government businesses. We think that the assets listed could make a big contribution, but there will not be a fire sale. We will seek to extract the most value for taxpayers from the sale of the assets. That is why the Chancellor will return to the House with a portfolio of assets that we think it is right to sell over the next couple of years-the assets to which the hon. Gentleman referred will, I think, be among them.

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