The royal hole in George Osborne's privatisation sale

Outlook

The Government is very keen on privatising state assets. George Osborne is looking to flog £23bn worth of goodies – from the student loan book to the Royal Mail – by the end of next year. The Green Investment Bank will be added to the national jumble sale today.

But not all the family silver is up for grabs. Consider the Crown Estate, which reported that the value of its property portfolio has reached £9bn. It will also return a record £285m to the Treasury’s coffers.

As the Office for Budget Responsibility recently stressed, selling a state asset to the private sector for what it’s worth doesn’t improve the public sector balance sheet. What’s gained in sales receipts is lost in future earnings. No, the logic for privatisation is that state assets are much more efficiently managed in the private sector – and that is what ultimately yield s a better economic deal to the public. So why not sell the Crown Estate? Why should its lucrative suite of shops on Regent Street, for example, be managed by Crown Estate commissioners rather than private sector landlords?

Yes, the estate provides an income to fund the work of the monarchy. But the sovereign only receives 15 per cent of the estate’s annual profits. That implies the Government could sell off at least half of the property portfolio and still comfortably keep the wolf from the Queen’s door each year.

The Treasury replies that the estate is not owned by the Government, making a sale impossible. But this is a mere technicality. The economic benefit of the assets accrues mainly to the state. The estate is certainly not the Queen’s private property. A bit of persistence and ingenuity from the Chancellor could surely get around this. Or could it be that there are places to which even Mr Osborne’s privatising zeal won’t take him?