Faced with charges of a borrowing splurge on so called capital investment the Treasury says there will be guard rails. They will not borrow all they will be allowed to under their new laxer rules. It would be more convincing if they told us how they choose the investments,how they will control them and what the actual borrowing limit is going to be.
The sad truth is the nationalised industries have a dreadful record of unproductive and unprofitable investment. A very expensive Post Office computer system sent honest employees to prison and landed taxpayers with a large compensation bill. The Post Office has presented taxpayers with accumulated losses of £799 million despite or because of the bad investment. HS 2, a nationalised railway, has been unable to deliver an important project to time or anywhere near budget. The project has had to be slimmed down losing its main point of going to the North of England. There will not be enough extra revenue to make a profit or pay the interest. The rest of the nationalised railway spends on capital only to need more subsidy and state support.
All the time roads are nationalised and paid for out of road taxes that greatly exceed road costs there is a case for further expansion and improvement in the network on state borrowing. Unfortunately this government so far has announced cuts in new road spending. Roads are crucial to our economic success as service providers and on line parcel deliveries come by van, ambulances drive to hospitals and trucks supply our factories by road.
There is no need for government investment into most energy projects. Customers are made to pay high prices for U.K. energy. If the government let the private sector make the investments we need in replacing imported LNG and building some additional gas turbine capacity we could boost growth and help lower world CO 2.
October 26, 2024
Government of whatever colour, and their increeasingly politicised civil service are incapable of running the UK economy as a whole, or any individual capital investment project within it. All end in failure in their purpose and overrun in their cost. Usually their purpose melts away before completion, leaving a trail of damage in their wake. Cause, the majority of politicians and their civil service are neither trained nor capable of running anything. They are no better than pox doctors clerks empowered beyond their pay grade.
The one person who seems to have realised this, apart from Nigel Farage, is Kemi Badenoch. Her stated intention would seem to be to professionalise the whole rocky edefice, political and civil service. I wish her well in achieving the leadedship and necessary control. The process is long overdue. It would be an indulgent luxury to think the present circus of incompetence can continue.
October 26, 2024
Governments are clueless about making investments, assessing risks and earning returns as your examples demonstrate. This Labour government promises to be the worst yet with its cavalier attitude to increasing debt and rush to spend our cash on sure fire losers (with Miliband leading the way). It is also evident that Starmer, in his struggle to define a “working person” could not care less about those who risk their time, effort and cash in investing in businesses. No wonder so many are watching and waiting the budget and whether to join those who have already voted with their feet and their wallets to move to more business friendly climes