Why sell UK assets abroad when the government should be buying them instead?
Umm?
I did, of course, have just one thought, which is why couldn’t the UK state have bought that company?
Because we’ve had bad experiences with state owned energy companies?
We learned today that the UK state will issue £247 billion of bonds in the next year, which is a fall from the current year. The figure does, of course, include rolled-over debt as earlier issues are redeemed and then replaced.
So, the capacity to issue new bonds to buy assets exists. And the reality is that issuing such bonds is costless to the government. All they represent is a promise to pay in the future, which will, in practice, never be met because they will always be rolled over.
The current interest rate on government bonds in issue is below 4%. This company could more than cover the resulting interest cost from its profits, better than any third party could cover the cost. There would, as a result, have been no net cost to the UK Exchequer.
Well, yes, except there’s such demand for UK Gilts that the Bank of England currently owns £600 billion of them. Which is one of those little indications. In fact, Spud even complains about this – when the BoE sells off a few more that means that the interest rate on gilts rises. So, what will happen if we issue just another £10 billion in gilts? The interest rate to be paid – and, note, paid on all new issues, not just the £10b – will rise. Because, as that £600b in stock shows, there’s a limit to how many gilts the market desires.
But there’s more!
As a country we run a large trade deficit. This means that we must – given that we are running a current account deficit – run a capital account surplus. We just have to, no way around it, this is an identity. So we have to allow foreigners to buy assets.
This is true whether the govt issues gilts to foreigners to buy assets or allows foreigners to buy assets directly.
But even more!
Buying this company would, therefore, have made economic sense. The government, the country, and its security would have improved; profits would not have been flowing abroad. Sterling would be protected as a result.
The influx of capital to buy the company boosts sterling right now. And, obviously, the price of the purchase equals the nett present value of the future profit stream – by definition.
Spud thereby ends up with the claim that sterling’s value is boosted by not allowing foreigners to buy sterling assets. Which is as certinous a thing as he’s said among many, many, others.
I genuinely do not understand how anyone who lives in this country and sees the state of it thinks the government should be in charge of anything.
To choose one issue that causes everything from delay to costly repairs to death, look at the state of the roads.
Rural areas like mine are worse than other places, but our neck of the woods is not completely on its own in having roads that approximate the third month on the Somme.
We know how to fix this issue, it is not complicated, it’s not even difficult.
We pay many thousands of pounds each year to people we have elected or employed to fix it, and things merely deteriorate.
Yes, put those people in charge of industry, that will work out well.
We recently had a pothole in our road that we referred to as “the abyss”. So they repaired it. The repair lasted about 48 hours and it was an abyss again.
We decided that the repair had been abysmal.
boom-boom tish!
Add a bit of topsoil and plant flowering plants in it. It makes the pothole more visible to motorists.
You seem not to understand communists.
They want to be in charge, not because they will do a better job, but because they want to be in charge. Destruction resulting from their governance is NOT THEIR PROBLEM.
It is a fatal mistake to project your decency on communists.
“Power is not a means; it is an end. One does not establish a dictatorship in order to safeguard a revolution; one makes the revolution in order to establish the dictatorship. The object of persecution is persecution. The object of torture is torture. The object of power is power.”
George Orwell, 1984
You seem not to understand my point. I’m not talking about people who ‘want to be in charge, not because they will do a better job, but because they want to be in charge’ – I entirely understand their motivations, which are pretty much as you say. I’m talking (as I thought was clear) about the average Joe who still places his faith in such people.
I explained it. They project their decency on people who want totalitarian control.
That has no bearing on whether or not I understand communists.
Because they are communists. Duh.
What?
This argument about being able to cover interest costs of say 4% from profits would surely apply to the government buying Greggs which IS key national infrastructure.
But as we’ve seen with councils buying shopping centres, business enterprise parks, warehousing and the Welsh government buying an airport, profits seem to vanish when government owns.
Local governments have borrowed tens of billions to spaff on commercial real estate and they’ve fucked it up every time. All the while they have bleated about Thatcher being to blame for the lack of public/affordable housing.
Also to be noted is that he’s now working openly with Islamic state, putting out ‘anti-Reform’ videos – the post after the one Tim is fisking here.
The hypocrisy is off the charts here. From Murphy (as we’ve come to expect of course), but also his fluffer, Robert D
Robert D says:
February 26 2026 at 10:37 am
Stumbled by accident on Talk Radio one afternoon – a presenter called Ian Collins. It was actually quite shocking to hear, the public bar level of discussion and invective directed at everyone and everything that wasn’t Reform or even farther right (which they actually see as the “centre”).
To quote some examples, Starmer is presiding over a “totalitarian state” and living in the UK feels “like living in North Korea”; the Greens (and Labour) are “communist, paedophile enabling, Muslim-lovers”; and Andrew has done “nothing wrong” and the police investigation is “waste of taxpayers’ money”.
I suppose it shouldn’t come as a surprise that Talk Radio is funded primarily by News UK, a subsidiary of Murdoch’s News Corp, but should not Ofcom, as the regulator for radio in the UK, be holding the likes of Talk Radio to account on some sort of journalistic standards?
Or does “freedom of speech” over-rule everything, even when it descends into the gutter?
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Richard Murphy says:
February 26 2026 at 11:17 am
I have been on with Ian Colins
Let’s say we did noit get ion
I think he closed me down bevause I would not agree with him.
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Didn’t realise ANYONE broadcast opinions anywhere close to mine!!!
So this week, commie dick Murphy suggests selling bonds, and never paying them off.
Last week, it was pick money off Mosler’s Magic Money Tree.
How does he know which is appropriate for a given problem?
All I know is, time travel isn’t real because Hitler drove in an open top car.
Follow me for more recipes.
The Time Police would not allow it!
Seriously, if not the Austrian House Decorator, it would have been someone else much the same. The rubber band of history.
Except the alternative might have actually listened to his generals…
TtC, I believe that nice Mr Goering, when asked why Hitler surrounded himself with YES men, said “all the NO men were 6 feet under”…….
Perhaps if the State didn’t take so much of our money, people in Britain might have been able to afford to buy whatever this is?
Or perhaps it’s a dog that no sensible investor would touch with a bargepole?
Either way, there’s no good reason for the government to buy it.
Now that’s a hot take. Borrowing a quarter of a trillion, might as well go a few more, eh?
Maybe Mr Murphy should consider going on a diet: Britain has to import food and since a succession of Labour governments have all made UK exports less and less competitive – with occasional offsets by the intervening Conservative governments and/or British designers/inventors – the only way to pay for the food that is making and others fat is to sell assets to foreignors.