As the Government sets about implementing a programme of sell offs, new research shows George Osborne will raise more cash from the sale of public assets this year than from the last two decades of privatisations combined.
Tory plans to pass publicly owned services into the hands of private companies are likely to generate around £31.8 billion for the Chancellor in 2015/16 with parts of RBS, Royal Mail and Lloyds up for grabs.
Mr Osborne began his programme of sell-offs this week when he authorised the disposal of £2.1 billion of shares in RBS, representing a £1 billion loss to the taxpayer, seven years after the bank was rescued by a £45 billion Government bailout.
Shares in RBS are trading 33 per cent lower than when the Labour government initially purchased them. If the Government sells all it’s holding at this price it will end up losing around £15bn of public funds.
Back in 2013, Under the Coalition, 70 per cent of the public stake in Royal Mail was sold, and last month Mr Cameron announced half of the remaining shares had left public hands.
If Osborne's proposals are seen through, it will be the largest amount of money raised through the disposal of public assets in any 12-month period in modern history.
This year's proposed sell-off total, currently £31.8 billion, is roughly just one fifth of the total amount raised by all privatisations from 1979 to 2014, a period of 35 years.
Despite Mr Osborne’s huge proposals, Nigel Lawson will remain the chancellor who raised the most money through privatisations, selling off around £73 billion of public assets as Chancellor between 1983 and 1989.
During 13 years of Labour government, Gordon Brown and Alasdair Darling barely sold off only £6.4 billion of public assets, including National Air Traffic Services in 2001 and British Nuclear Fuels Limited from 2006-9. Osborne will privatise assets for nearly five times this figure in just one year.
The sale of the Government's remaining shares in Lloyds, estimated to bring in £12.9 billion this year, would be the single biggest privatisation since the sale of British Gas in 1986, which raised £20.3 billion.
Sales planned for the next few months, including the Government's remaining 30 per cent stake in Royal Mail, are estimated to raise £1.5 billion, and shares in Lloyds totalling around £12.9 billion. The privatisation of £2.3 billion of student loans, along with assets from the former bank Northern Rock and other sales, would bring the total for 2015/16 to £31.8 billion.
The previous 12-month record was set in 1991, when proceeds from the sale of government stakes in BT, National Power, PowerGen and regional electricity companies in Scotland raised £22.5 billion.
Len McCluskey, General Secretary of trade union Unite, has described todays findings as "the sale of the century", and accused Mr Osborne of "rewarding the Tory party's friends in the city in a spectacularly lavish style".
"These are public assets belonging to the taxpayer, held in trust for the future for the benefit of the many, not for the financial gain of a rich city elite," said Mr McCluskey.
All figures are today's prices, calculated using RPI.
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