The announcement the government is to sell off £16bn worth of ‘non-financial’ assets to reduce the budget deficit has been greeted by little more than a shrug by almost everyone except the Conservatives, who managed to muster enough interest to grumble something about cutting public spending before returning to the much more important matter of how to avoid repaying their expenses.
Gordon Brown said the portfolio, which includes such assets as the Dartford crossing, the Channel Tunnel rail link and the student loan book, will help finance new investments and reduce the debt burden.
But the portfolio also includes Wigan-based bookies Tote. Inquisitive souls might wonder what on earth the government is doing with high-street betting chain – and why Gordon Brown thinks he can make money by selling a chain which, hit by the triple whammy of recession, the rise of online gambling and the smoking ban, has seen its number of shops decline by almost 10% in the last year.
According to its website, the Tote was set up by an Act of Parliament in 1928 to offer on-course pool betting, rather than starting-price betting with bookmakers.
The government has been threatening to privatise the company since 2001, when it was part of the Labour Party manifesto, and since then it has been something of an albatross. Privatisation was mentioned in the 2006 Budget, and then again in 2007, when the government invited the company’s staff to bid for it, but the offer was thrown out by the Department for Culture, Media and Sport. A 2008 attempt to sell the company on the open market failed again, when an audit forced the government to retract the offer.
Who will take control of the chain? As the smallest of the high street’s ‘big five’ bookmakers, Tote could easily be swallowed up by one of its competitors – but considering William Hill has seen its profits drop by nearly £20m in the last 12 months; Coral’s owner, Gala, has had to write off £540m of debt and even today, Ladbrokes has seen its shares drop to an eight-month low, a deal like that seems unlikely.
More likely is that the business will continue to stay in the hands of an increasingly frustrated government, who, every time they need to look as though they are doing something to repay debt, will dust the idea of selling it off, put it on the news agenda for a few days, then quietly mothball it and hope no one notices.