Nik Darlington 9.58am
When George Osborne said the Treasury would raise several billion pounds from the upcoming 4G auction, I along with many others feared (or even expected) that wouldn’t be the case. Some technical and financial reasons for why, but largely an informed hunch.
So it has come to pass. ‘Only’ £2.34 billion has been raised by Ofcom, despite the OBR’s forecast of £3.5 billion.
A couple of observations about the reporting of all this: first, £2.34 billion is still a useful fillip not to be sniffed at; and second, this mini embarrassment has given journalists a perfect excuse to ignore the good employment figures also released today.
Yet a mini embarrassment it is. Perhaps Mr Osborne should not have brandished an outcome ahead of time, but auctioneers tend to set target prices with little impact on bidding behaviour other than to focus it around said target. It isn’t a patch on Gordon Brown selling our gold reserves having already announced to the world his intention to do so.
On the subject of auctioneers, however, something odd happened on BBC Breakfast earlier today. Ed Richards, Ofcom’s chief executive and unsuccessful candidate for BBC director-general (despite being the bookies’ favourite), was on talking about the auction. Mr Richards stated that Ofcom’s priority - as auctioneers - was straightforwardly to hold a fair and proper auction and “ensure that a valuable economic resource was brought into productive commercial use”. Ofcom’s priority - as auctioneers - was certainly not to maximise revenue.
Whether or not this was on instruction from the Government doesn’t matter. It is still odd. Tell auctioneers at Christie’s that the whole point is just to shift stuff and not to maximise revenues, you’ll be laughed out of the room. These are, as Mr Richards also said, “very different times” compared to the 3G spectrum auction, which raised £22 billion in 2000. But it doesn’t mean you shouldn’t at least have a go at it.
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