Property slump hits Gordon's spending plans

Rochdale_Pioneers

purch wrote: »

Yes the Conservative governments from 79 to 97 sold huge chunks of the nations infrastructure, housing stock etc etc.

Using that fact to deflect all criticism of the current regime is ludicrous.

As a voter in a democratic nation, you should be allowed to have a say about the current Government, irrespective of what previous regimes might have done.

You can't criticise Brown, cos Thatcher did it too.

You can't criticise Stalin, cos Lenin did it too.

I quote agree - but who is deflecting all criticism? I haven't said a thing about housing sell-off now - so far. It seems bonkers to sell now at the bottom of the market but so many things that governments do are bonkers that I can't say I am surprised.

The comparison with the 1980s was prompted by the OP referring to a history degree. History shows us that the previous government sold off large sections of national infrastructure for many multiples less than their actual value. Does that justify whats going on now? No. Does it put it into context when Brown is portrayed as the first PM to commit such acts of madness? Yes.

JasonLVC

Rochdale_Pioneers wrote: »

Not in the price they realise. Thanks for being the first respondant to actually recognise the facts of the 80's privatisations - most posters think that on the 8th day God created Gordon Brown and made him Prime Minister, and it was Bad.....

The selling off of assets is nothing new - but at what price those assets are sold for...well, that is a concept currently unique to Brown himself.

The controversial sale of QinetiQ sorings to mind, a massive market under valuation with the Public Accounts Committee not being very happy - http://www.telegraph.co.uk/finance/newsbysector/industry/2791395/MPs-attack-QinetiQ-chiefs-over-privatisation.html

To be making assets sales in the current climate is ridiculous (unless we really are broke as a country?). Someone will make a killing if these sales go ahead, but it'll not be the taxpayer.

Perhaps the government could persuade the Queen to sell some of their land/castles (ie, do we need Balmoral, Sandringham and the various estates they have?). If we can persuade Sir Fered to give back some pension, maybe Queenie can give up a castle or too.

JasonLVC

Rochdale_Pioneers wrote: »

IHistory shows us that the previous government sold off large sections of national infrastructure for many multiples less than their actual value.

Is that a general sweeping statement or an actual point of fact?.

We'll never know for sure due to the passing of time, but the sell offs were done under the normal regulations of valuing a business and determining a share price thereafter, accepting some anomolies of valuing a public sector entity within the parameters of a private ssector business.

The stock exchange would not tolerate an act of undervaluing a business (nor would investors?).

Rochdale_Pioneers

JasonLVC wrote: »

The selling off of assets is nothing new - but at what price those assets are sold for...well, that is a concept currently unique to Brown himself.

The controversial sale of QinetiQ sorings to mind, a massive market under valuation with the Public Accounts Committee not being very happy - http://www.telegraph.co.uk/finance/newsbysector/industry/2791395/MPs-attack-QinetiQ-chiefs-over-privatisation.html

How is this any different to the privatisation of Railtrack? Or British Gas and others? They were sold massively discounted and made immediate fortunes for the people fortunate enough to grab shares at floatation. That was the whole point - flog them ludicrously cheap, create demand, make people think buying shares is Good.

In all cases its a scandallous waste of money that should have come to the public purse. I absolutely agree that the QinetiQ sale was bonkers - but unique? Hardly. Unless you live in a 1997 as year zero world.

JasonLVC

Rochdale_Pioneers wrote: »

How is this any different to the privatisation of Railtrack? Or British Gas and others? They were sold massively discounted and made immediate fortunes for the people fortunate enough to grab shares at floatation. That was the whole point - flog them ludicrously cheap, create demand, make people think buying shares is Good.

In all cases its a scandallous waste of money that should have come to the public purse. I absolutely agree that the QinetiQ sale was bonkers - but unique? Hardly. Unless you live in a 1997 as year zero world.

I'll ask the question again.

How do you know that they were sold at massively discounted prices?. It is okay to say that this is your opinion/gut feeling - but let's not confuse fact with fiction. My point being, define massive (90% less than market value, 50%, 20% - can you now see why 'massive' means nothing to me?)

Even we if acccept they were sold at a 'massive' discount - they were still sold when share prices were not rock bottom (ie, not during a recession).

As for Qinetiq, the difference is this was what I'll describe as an internal sale, that is, this was not an open public offer. A buyer was already lined up and waiting (a US firm, shareholders include GW Bush and our very own John Major!) so the shareholders had a cast iron guarantee of seeing their investment quadruple overnight.

Contrast that with BT or BG which saw share prices gradually increase a little before levelling off so no massive killings were made here, unlike Qinetiq.

michaels

RP - very nice (and interesting) to see you back spinning hard on the day Labour try to reclaim the news agenda with their new 'policy vision'.

I wonder if political hacks do it for conviction or are happy to work for the highest bidder?!

I notice mortgage advisers have to add a little disclaimer in their signatures - maybe those paid by political organisations should also state their affiliation?

ad9898_3

Rochdale_Pioneers wrote: »

Perhaps he has been studying your performance on Money Saving Expert forums.

Unlikely, Gordon listens to, or studies no one.

JasonLVC

michaels wrote: »

RP - very nice (and interesting) to see you back spinning hard on the day Labour try to reclaim the news agenda with their new 'policy vision'.

Not really this forum thread but I note that brown has gone for a vote winning 'homes for locals' policy. Straight off the BNP guidebook (and which if mentioned by them would have been deemed racist).

Another policy that is all hot air. The rules already force Councils to give housing to the most needy....which'll be mainly foreigners. To change this will cause a human rights meltdown as to discriminate against needy folks at the expense of local white people breaks more or less every rule in the EU hand book.

But you've gotta laugh that this is the best that Brown can come up with when we need vision, direction and hope.

Rochdale_Pioneers

JasonLVC wrote: »

I'll ask the question again.

How do you know that they were sold at massively discounted prices?. It is okay to say that this is your opinion/gut feeling - but let's not confuse fact with fiction. My point being, define massive (90% less than market value, 50%, 20% - can you now see why 'massive' means nothing to me?)

Struggling to find historical share prices on these. Have found plenty of references to 25-30% boosts immediately after privatisation (a loss of £3bn to the taxpayer - enough to be considered "massive" in most people's books). BG shares hit £10 after a few years didn't they?

A bit peed off tbh - Google isn't delivering any results to either prove or disprove my point most unlike me!

JasonLVC

Rochdale_Pioneers wrote: »

Struggling to find historical share prices on these. Have found plenty of references to 25-30% boosts immediately after privatisation (a loss of £3bn to the taxpayer - enough to be considered "massive" in most people's books). BG shares hit £10 after a few years didn't they?

A bit peed off tbh - Google isn't delivering any results to either prove or disprove my point most unlike me!

It is alright RP - I did mention in my other post that we may have to go with our guts on this one. Even I'm not entirely sure (but as a share holder in most of the ex-public industries I have a rough idea).

Any share issues in recent years will see an instant boost to their values - thats how it works usually, even for existing private firms floating for the first time. The true value is the longer term price and for the nationalised industries, they generally levelled out within a year (as all the little investors flipped their sales) leaving the hardcore long termers.

We cannot get bogged down by what the value of BT or BG was after 5-10 years. As a private company, that added value was added after the sell-off. The added value will have come from investment and business strategy that could never have been possible under public ownership and so is irrelevant to the overall equation.

A private BG/BT can buy foreign companies and obtain investor funds for capital growth, whereas under public ownership no purchases of competitors would happen nor any great investment in infrastructure (unless we go the way of the dreaded PFI!!!).