Brown carries on with state sell-off

By James Ashton
Updated: 04:12 EDT, 7 December 2006

Household names such as the Met Office, Ordnance Survey and the Driver and Vehicle Licensing Agency (DVLA) could be next on the block as Gordon Brown's car boot sale of state assets continues.

Just as the City thought he had scraped the cupboard bare, the Chancellor will assess all of the government's 'trading funds' next year with a view to further disposals.

These are Government-owned businesses allowed to hold back their profits for investment. Others include the UK Hydrographic Office, which provides maps to more than 80% of the world's shipping, and the Queen Elizabeth II Conference Centre opposite Westminster Abbey in London. Britain's air traffic control system and Scottish Water will also be examined for sale.

Brown's sell- offs already rival the great privatisations of the Thatcher and Major governments, when water, telecoms and gas companies were hived off.

The only things safe from sale at the moment are Channel 4 and the Royal Mail, where chairman Allan Leighton is locked in a battle with the Department of Trade & Industry to hand postal workers 20% of the company as an incentive.

As expected, Brown will look at 'restructuring options' for London and Continental Railways, once the Channel Tunnel Rail Link it owns begins carrying Eurostar trains into St Pancras next November. Hopefully he can recoup some of the £4bn of taxpayers' money used to bail it out in 1998. LCR owns swathes of East London land close to the Olympic site and property developers are salivating.

Its sale will be marginally less controversial than the February flotation of Qinetiq, the Ministry of Defence's former research arm, which lined the pockets of private equity firm Carlyle and earned £350m for the Treasury.

Brown still hopes to raise more than £200m shortly by offloading the Tote to the racing industry. But plans to sell part of his option over 65pc of nuclear group British Energy look tricky while cracked reactors are being repaired. Chunks of radio spectrum and uranium enricher Urenco have also been earmarked.

All of these assets are on top of the £30bn target he has set for surplus government property and land selloffs by 2011.

Some £12.2bn has rolled in so far, including civil service car parks, army barracks and £50m of land in Bangkok owned by the Foreign Office.

Brown is making it easier for ministries to sell land that has fallen in value by shifting accounting impairments to an emergency fund so they do not hit departmental budgets.