Page last updated at 14:38 GMT, Monday, 12 October 2009 15:38 UK

Brown unveils 16bn assets sale

Gordon Brown outlines the assets which will be sold off

Gordon Brown has announced a £16bn sale of government assets in an effort to reduce the growing budget deficit.

The Dartford crossing, the cross-Channel rail link and the nationalised bookmaker the Tote will be among items going on sale over the next two years.

The prime minister outlined initial plans to raise £3bn, including selling some government real estate.

But opposition parties said Mr Brown needed to do far more to ensure the UK lives within its means.

Downing Street said the sale marked the beginning of a radical assessment of what other non-core government business activities can best be done by, or in partnership with, the private sector.

BBC economics editor
If the proceeds aren't used for anything else, they could help cut the deficit over the next three or four years. But it can only be a short-term fix
Stephanie Flanders, BBC economics editor

Aides added that although these actions are important, a vital force for debt reduction will be the restoration of strong, sustainable growth within the economy.

In April, Chancellor Alistair Darling forecast that public borrowing would reach a record £175bn over the next two years.

The funds raised will help finance new capital investment and pay down debt, Mr Brown said.

'Depressed markets'

The initial offering will include the Channel Tunnel rail link.

The government's 33% stake in Urenco, a European consortium which supplies equipment to enrich uranium for the nuclear industry, will also be offered.

The government will also sell surplus real estate which is part of the £220bn owned by its departments and agencies.

We shouldn't confuse selling assets with dealing with the real underlying problem,
Philip Hammond, Shadow chief secretary to the Treasury

Mr Brown said premature cuts risked "snuffing out" the economic recovery when the job of fixing the global economy was only half done.

However, he conceded that the "growth of overall spending" must be reduced after April 2011, by "cutting back on low-priority programmes, increasing efficiency and productivity and unwinding the programmes that have been put in place to support demand over the last year".

The Conservatives said the sale was "probably necessary" but "no substitute for a long-term plan".

Leader David Cameron said: "Obviously we do need to do this, but we must make sure - as every family knows - if you sell something it can help you in the short term, but it doesn't actually help you live within your means in the long term.

Cameron: ''We must get good value for money''

"So, we've still got to get to grips with public spending, get to grips with the deficit - and we must make sure we get good value for money.

"Let's not forget, this is the prime minister who sold our gold reserves and if he'd sold them later he could have got four times the quantity. So, let's not have any more incompetence from him."

Liberal Democrat Treasury spokesman Vince Cable said the policy was fundamentally flawed.

He said: "What worries me about the government proposal is that they're proposing to sell off in very depressed markets, under very depressed markets for land and for shares."

In Commons exchanges on Mr Cable called it a government car boot sale and highlighted the number of "false starts" the Tote sell-off had already suffered.

Margaret Eaton, chairman of the Local Government Association, said she was amazed the announcement had been made without consulting her organisation.

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