UK's Royal Mint is top prospect for privatization

By Samantha Pearson
Financial Times, London
Sunday, March 15, 2009

http://www.ft.com/cms/s/0/d4eee5a2-1190-11de-87b1-0000779fd2ac.html?

The Royal Mint, which manufactures coins for the UK and over 50 other countries, has moved to the top of the government's privatisation list as it looks for ways to ease the huge pressure on public finances in the wake of the banking crisis.

In November's pre-budget report the Mint -- a trading fund of the Treasury -- was added to a list of eight other government assets to be considered for "alternatives to public ownership."

However, the Royal Mint is now the main target for a selloff, according to a person close to the negotiations.

While only one of the three operations -- UK, overseas, and commemorative coin production -- could be targeted for privatisation, it is more likely that the entire Mint will be moved out of the public sector.

An announcement in principle is expected to accompany the budget next month, although the transition to private ownership will be lengthy because of the necessary changes in legislation, said another person involved in the process.

Since the country's bank­notes are produced by De La Rue, a FTSE 250 company, all of the UK's currency production would then be privately controlled.

Further down the list of government-owned assets included in the budget's Operational Efficiency Programme are the Met Office, the Ordnance Survey, and British Waterways.

The Treasury refused to comment on the Royal Mint pending the outcome of its review of potential privatisation targets. That inquiry is being led by Gerry Grimstone who was in charge of privatisation policy under former Prime Minister Margaret Thatcher and is now chairman of Standard Life, the insurance group.

However, Gordon Brown indicated there would be another wave of asset sales when he announced proposals on the public sector earlier this month.

The Mint has previously been earmarked for privatisation but the plans were shelved in 1999 because its operational structure was deemed "too archaic." Ensuing periods of financial loss meant the Mint was an even less attractive investment.

However, under Andrew Stafford, its new chief executive, the Mint has rapidly reversed its fortunes.

"We would welcome any change in our status that would enable us to make the business more successful," he said. But unions in south Wales -- where the Mint is based -- oppose the plans.

* * *

To contribute to GATA, please visit:

http://www.gata.org/node/16