Friday, 10 December 2010

Back pocket

It appears that asset sales have not been included in the Treasury's projections for public finances.  How much these will be is hard to predict (particularly as the sale of bank shares will play a part in it) but the Treasury Committee Chairman expects the revenues to be substantial: 

"My best guess is that you’re going to find yourself not wanting to hypothecate it, in which case you’re going to have quite a bit in your back pocket as the years go by."

What is to be done with these extra revenues?  Apparently not just deficit reduction:

"Proceeds would go to a number of purposes, Osborne said, such as capitalising the government’s planned Green Investment Bank...I’m not wedded to all proceeds from asset sales or privatisation going into deficit reduction...Just because I’m open to discussion does not mean it’s open season. "

Although it may have to be used as contingency if the reliance on welfare cuts to deliver spending reductions proves as illusive as it has in the past.

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