Seeking to pare debt and create funds for infrastructure spending, Osborne’s treasury said yesterday it will allow the rail system to sell assets and will look to dispose of its 49% stake in the air traffic service and bring private capital into Ordnance Survey.
Coming as the UK government pares its holdings of bailed-out Royal Bank of Scotland Group and Lloyds Banking Group, the plan evokes memories of the wave of state assets sales by then-prime minister Margaret Thatcher in the 1980s.
A beneficiary then, and likely again, are the banks under-writing the deals and providing services to investors.
“It’s a boon for the city,” said Peter Hahn, a senior lecturer at Cass Business School in London and a former Citigroup executive.
“New share offerings are just about the most lucrative part of investment banking.”
Osborne will also press ahead with the privatisation of Green Investment Bank with a sale expected by the end of 2017.
Created by the government in 2012 to invest in environmentally-friendly infrastructure, it has backed projects with a total value of over £10bn.
The government will consult on how to move the work of the land registry, which documents the ownership of land and property, into the private sector.
Assets owned by the department of health will also be sold.
Ordnance Survey is a 100% government-owned UK mapping service, which dates back to the French revolution.
It generated £45.8m of earnings before interest, tax, depreciation and amortisation in the year to March 31.
Land registry, a government department documenting the ownership of land and real estate across England and Wales dates back to 1862.
It reported almost £300m of income in its 2014 to 2015 accounts.
The government is also continuing to pursue the sale of student loans generated between 1998 and 2012 with the first divestment expected in 2016 or 2017.
Osborne is already seeking to reduce the government’s 73% holding of RBS by selling £25bn of its shares by 2020, even at the risk of a loss and will raise a further £5.8bn by divesting stock through 2021.
It also plans to sell £7.5bn of assets from the remnants of Northern Rock and Bradford & Bingley and should complete its withdrawal from Lloyds, Britain’s biggest mortgage lender, next year.
The treasury made no mention of broadcaster Channel 4, the Royal Mint or the weather service, the Met Office, all of which have been viewed as potential privatisation projects.
“A lot of banks have been hiring former government treasury officials, quite a few of the people work in the city now,” Hahn said.