�22 billion phone sell-off
Brown stashes mobile billions
CHANCELLOR Gordon Brown now has another �22 billion to add to the billions he already has in his "war chest". He does not plan to spend a penny of it on the services and well-paid jobs millions of workers have been holding out for over the last three years. He raised the �22 billion through the sale of licences to mobile phone companies.
It is enough money to pay for:
- 27,248 extra nurses for the next five years, or
- 180 new hospitals, or
- 7,493 new primary schools, or
- �40 a week extra for every pensioner for a year.
Or Brown could use it to pay for universal access to decent water and sanitation for the world's population for the next five years. But New Labour says it will use the money to pay off the national debt. One effect of that will be to raise the level of the pound, hitting manufacturing industry.
We foot bill
MOBILE phone users will end up footing the bill for the cost of the operating licences mobile phone companies have bought. The auction was effectively a privatisation scheme. New Labour is giving private companies the ability to make more money in the future.
The winners of the bids were TIW UMTS (a conglomerate mainly owned by Hong Kong company Hutchison Whampoa), Vodafone, BT, Orange and One2One. These companies will push the cost of their bid for the licences onto customers by charging more for phones. That will hit everyone who uses a mobile phone. As Raymond Snoddy put it in the Times, "The five owners of the 20 year, third generation licences could be laughing all the way to the bank."
There would be a much easier way for the government to raise billions of pounds. That would be to raise taxes on the profits of the big mobile phone companies and other giant firms. But the government has lowered the corporation and capital gains taxes that big businesses pay.