Osborne looks to streamline banking assets through new company
UK Chancellor of the Exchequer George Osborne has announced the establishment of a government-operated company to streamline the sale of £23bn worth of bank shares and other publicly owned assets.
Osborne is planning to target areas like transport, skills and broadband access which have potential for structural improvements in order to give a boost to Britain's low productivity, reported Reuters.
UK Government Investments, as the new entity will be called, will aim at getting the best price for public assets by combining expertise within the UK Financial Investments and the Shareholder Executive.
While UK Financial Investments manages the government's stake in the Royal Bank of Scotland and Lloyds, the Shareholder Executive is responsible for controlling 23 other stated-owned businesses.
The government had announced recently that it intended to sell £9bn Lloyds Banking Group shares and home loans held by Northern Rock and Bradford and Bingley, worth £13bn by the end of 2015/16.
The UK government is putting these plans in place to recover £66bn that had been spent on bailing out financial organizations affected by the economic crisis of 2008.
Reuters quoted extracts of a speech that Osborne is scheduled to give to the business leaders: "If we want a more productive economy, let's get the government out of the business of owning great chunks of our banking system - and indeed other assets that should be in the private sector.
"Improving the productivity of our country is the route to raising standards of living for everyone."
Osborne will also encourage government departments to come up with ways of further reducing spending.
Image: The UK government is initiating these plans to recover the £66bn that was spent on bailing out financial organizations during the economic crisis. Photo: courtesy of Serge Bertasius Photography.