Investments need to cover their costs and make a return

Labour have been good at abusing the word investment. Traditionally it refers to a decision to spend money on equipment or property that allows you to supply goods or services over a period years. This spend can be accounted for as capital spend, with building or equipment included as an asset in the balance sheet. If an enterprise spends more on employing people or on energy that is a running cost Ā to be included as a cost in annual accounts.

You can argue that spending on training or research is an investment as they may yield benefits in future years that add revenues.

If you do spend on capital items you often have to borrow to pay for them. You put both the value of the item and the loan to buy it on the balance sheet. Businesses expect to earn sufficient money by having an extra machine or a bigger building to be able to pay the interest on the loan to buy them, to repay the debt over a period of years and make a profit.

The government often makes investments that cannot do this. It may be good to build a replacement school but there will be no extra revenue to pay the interest on the debt or return a profit. Plenty of investments in free services paid for by taxes need some other way of appraising their contribution.

The state also makes investments that can and should be appraised like private sector investments. New railway lines need to generate new and additional rail revenue to justify their capital costs. Green investments by Great British Energy or the National Wealth Fund need to be cash generative. I will discuss how in a future blog.

83 Comments

  1. agricola
    November 1, 2024

    You, me and many contributors to this diary have personal hands on experiece of what an investment is. To the best of information I have, none of the current front bench have ever run anything designed to make a profit. Nor have they ever even had to make choices between competing services that would lead to the most effective way of achieving a goal. They cannot even accept that the market is best at deciding these things. They seem driven by thought that emmanates from around Islington dining tables, and therefore live in a possibly alchohol fueled fantasy world of political theory.

    Rachael Reeve has suddenly discovered that her budget is a one off surgical necessity, but killing the patient, so ensuring there is no sun dappled life in the future she is selling on day two of her disasterous budget. She is erroniously borrowing vast sums of money after her destructive tax increases. Day two is the verdict day when everyone affected realises her budget is a death sentence. The only discentor being the IMF with whom she will be generating a closer dependant relationship in years to come. For sure on wednesday she pressed the UK’s self destruct button, confirming that the lunatics are back in charge of the asylum.

    1. Ian Wraggg
      November 1, 2024

      After announcing mega bungs for the NHS Streeting on tv yesterday said the money must be accompanied by reforms. Everyone knows you negotiate the reforms before handing over any money. Listening to him made me think just how naive this government was.
      Two tier, no idea Kier was on with his Dalek like performance
      He looks considerably unwell. I think both him and Thieves will be gone shortly. Then we will be subject to the nonesense of Crayons.
      What did we do to deserve this.

      1. Lynn Atkinson
        November 1, 2024

        The last Labour Government (I think, might have been the one before that) dealt with the Mugabe problem of seizing farms with no compensation to the (ethnically British) farmers. The ex-Rhodesian farmers were arriving in Britain penniless.
        The British Government agreed to give the Zimbabwean Government the money to pay the farmers!
        Guess what happened?
        Mugabe kept the money and continued to refuse to pay compensation for the farms.
        A child would have known that the money should have been paid to the farmers directly.
        There is no hope, they canā€™t learn, they know everything and they donā€™t need to learn from experience because they are personally insulated from the consequences of their idiocy.

      2. Mickey Taking
        November 1, 2024

        What did we do ? answer – we sat back and watched Conservatives select dopes, and we still voted them in to win GEs, fearful of Corbyn and Unions. This hopeless, mistake strewn set of Governments continued to the point that their voters and new watchers cried ‘enough!’
        Now we get our medicine and it will be more than a painful pill, the dose will last years, and the body we had come to recognise will get lasting damage.

      3. agricola
        November 1, 2024

        Ian,

        “What did we do to deserve this”. At very short notice only 4 million of us voted Reform. I anticipate a rapid increase in that direction from disaffected Labour and Conservative voters at the next GE. I don’t think anyone, pre or post budget, desereved the level of graft, venality, class envy, or lack of basic reading of the battlefield as displayed by this Labour government . They are all way beyond their pay grade. All too rapidly we have forgotten the historical record of Labour, who without exception always leave the country in a poorer state than when they entered office. This time I sense a desperation to achieve mega failure in as short a time as possible. I back Reform because, via their contract, they are the only party that understands the battlefield. I hope they appreciate that the real battle starts after winning the war.

        There is no point in having expectations of whoever wins the Conservative leadership, however fundamental the changes they wish to bring about. Their parliamentary party will not allow it, as our host and those of us observing found out over the last 14 years.

        The Lib /Dems are less in substance than the village council of Lower Bumbleton, but second in danger to the UK behind Labour.

        For Labour it is down to who gets them first, a revolution of disobedience or the IMF.

        1. Lynn Atkinson
          November 1, 2024

          Who exactly did you vote for, what were his/her politics?

      4. jerry
        November 1, 2024

        @Ian Wraggg; “What did we do to deserve this.”

        Vote for Reform, perhaps?…
        Good day!

    2. Lifelogic
      November 1, 2024

      Indeed a budget for growth (the destruction of) this after 14 years of fake-conservative anti-growth agenda. Somethings that certainly will produce no real return are HS2, Heatpumps, EV cars and vehicles (not even in saving CO2 not that that gives any benefit, net zero, abolition of. NonDoms, VAT on private school (what is needed is tax relief for them and more using them) investing in the NHS without sensible reforms (more going private is needed), the loans duff degrees circa 75% are, the war on landlords and farmers. Higher taxes deter investment and remove money from people who generally invest far better than governments do.

      ā€œInvestments need to cover their costs and make a returnā€ and often need to borrow and cover that interest too. It was the moronic Osborne who stopped full tax relief for landlords on interest – often taxing them at 100% plus.

      1. Lynn Atkinson
        November 1, 2024

        And Ā£5 billion for Zelensky now and Ā£3 billion each year ā€˜for as long as it takesā€™.

        1. Lifelogic
          November 1, 2024

          Let us hope Trump wins & can find some peaceful compromise.

    3. IanT
      November 1, 2024

      I watched the budget and looked at the motley crew of Ministers assembled on the front bench. If I still worked for a large multinational and these people were now on the Board, I’d be busy polishing my CV and dumping my share options. I suspect that is exactly what many talented staff members of UK Plc are doing right now if they have any sense.
      Wednesday was the first bite of the cherry and it won’t be the last..

  2. David Andrews
    November 1, 2024

    Do Labour even understand the concept of needing to earn a return on an investment? Between them all government ministers appear to have little, if any, experience of setting up or running a business. The utter ineptitude of the tax on farms is clear evidence that they are clueless about farming. Miliband’s planned energy “investments” will only serve to make energy more expensive and reduce its capacity to provide security of supply. The extra taxes on jobs and businesses will reduce returns and stunt growth.

    1. Mark B
      November 1, 2024

      The issue over the farms is, I believe, to do with HMRC. HMRC have, quite rightly, identified that wealthy people in order to avoid inheritance tax were buying up farms in order to pass onto their children and then sell on, with no or little tax paid, to HMRC. The amounts are small, much like they were when people were using limited companies to avoid paying ENIC and NIC via the use of dividends. Hence why we got IR35. Unfortunatly, it is a hammer to crack a nut approach and will cost HMRC, the government and the nation far more than they recieve.

      1. R.Grange
        November 1, 2024

        There is also a trend towards institutional investors buying up farmland, especially in the US but now here as well.

        1. Mitchel
          November 1, 2024

          Not to mention Ukraine-since Zelensky obligingly removed the prohibition on the sale of government owned farm land to foreigners.

        2. Mitchel
          November 1, 2024

          On the subject of food,Russia and Norway have just slashed the cod catch quotas for 2025:

          Barents Observer,1/11/24:”Cod quotas lowered for the fourth year in a row.”

          “Cod quotas in the Barents and Norwegian seas will total 340,000 tons,down 25% from 2024 and the lowest since 1991 and from a peak of 1m tons in 2013.Norway’s share will be 163,436 tons.Haddock and halibut quotas has also been reduced and there will be no capelin catch in 2025……Norway and Russia have managed to keep the Barents sea as one of the best sustainable fishing areas in the world.”

          1. Lynn Atk8nson
            November 1, 2024

            Fishing quotas result 8n many many dead fish dumped into the sea. Barbaric idea. Landing quota is understandable – just, but not spieces quotas.

      2. David+L
        November 1, 2024

        The thought struck me that dealing a death blow to family farms would allow them to be swallowed up by the large corporate enterprises. I’m sure that these multi-national companies will be very grateful and the quality of our food supply will continue its decline. For instance, I have read so many warnings on the health issues with seed oils in our food, yet the area of rapeseed covering our arable land seems to be increasing.

        1. Mark B
          November 1, 2024

          The thing about corporates is that, physically they cannot die. Yes they can go bankrupt etc. but if well run they can go on forever. They can also move from contry to country exploiting the most favourable tax regime and avoid inheritance or any other form of tax, hence why I said that HMRC and the government will get less as a result. They can also reduce supply thereby increasing scarcity and driving up cost, making larger and larger profits which then could be offshored to avoid further taxes.

          This is what you get when you put idiots in charge.

        2. Mickey Taking
          November 1, 2024

          Knowing family farms, and witnessing the generation who looked at their worn out and risk petrified parents, announce not for me, they went to Uni got good jobs, even could change careers if it didn’t work. So as the years go by the parents give up the labour intensive and staff support aspects and back away from optimum food production in their declining years. Will they all cease and sell where larger outfits are interested or even encourage developers where possible?
          I think the rapidly diminishing part British farms play in our food has been given a terminal diagnosis.

          1. A-tracy
            November 1, 2024

            Dyson Farming ā€“ the largest farming business in the UK – is improving harvests while protecting the environment. Dyson technologies such as robotics, vision based sensing, and energy storage, will increasingly drive further technology innovation on our farms. https://dysonfarming.com/why-farming/

            We donā€™t appreciate entrepreneurs. God help our grandchildren. We have the most self-centred, self-interested and self-absorbed group of people in charge who will follow their political narrative like a cult. Their unions may back off a little now theyā€™ve been enriched but not for long, nothing will be enough, they canā€™t create income for themselves so they have to steal others but when its gone its gone they canā€™t take it twice.

      3. Lifelogic
        November 1, 2024

        The solution to this problem is the abolition of inheritance taxes and all capital taxes. All taxes should be a % of profits and income say 25%. That is more than enough to fund the few things needed from government. Plus money and investments would flood in to the country rather than out as currently.

        1. Mark B
          November 1, 2024

          Agreed.

        2. Lifelogic
          November 1, 2024

          JR says ā€œNew railway lines need to generate new and additional rail revenue to justify their capital costs. Green investments by Great British Energy or the National Wealth Fund need to be cash generative.ā€

          No chance at all, the only reason the state is investing is because no sensible private investor would take these basket case investment on as the returns are never sufficient for the capital risks without state subsidy. They are driven by politics, corruption, vanity projects or trying to buy votes.

          Trains typically need circa 50% of ticket price in subsidies even when there is an existing track. Once we get self driving cars and taxis (which will cost far less than current prof. driver ones) the. trains will be even less competitive.

        3. Berkshire Alan
          November 1, 2024

          +1

      4. David Andrews
        November 1, 2024

        It that is the problem Ā£1 million is an absurdly low amount to set before the tax is payable. One farmer commented that a combine harvester alone costs Ā£500,000, a tractor cĀ£250,000 before starting on other equipment, buildings to house kit and store the harvest. Ā£10 million is probably closer to the mark to deal with the “problem” you identify. Of course Labour may be using the issue to destroy privately owned farms anyway along with their agenda to limit or destroy private ownership of anything.

        1. Lynn Atkinson
          November 1, 2024

          How much are second hand harvesters – when there is no harvest? Ā£1.30?
          The farm is fixed assets surely? So farmland needs to be revalued. If you make Ā£1,000 pa per acre, then the land is worth Ā£100 per acre using standard calculation of commercial values.
          The ā€˜farmhouseā€™ is a home – valued separately from the farm?

      5. Original Richard
        November 1, 2024

        Mark B:

        As you say the ā€œamounts are smallā€. So the reason is not driven directly by HMRC. It is a long-term way to reduce and eventually eliminate private farmers and to put all land into the hands of either the state or large corporations.

        Land ownership does not exist in Russia or China and the WEF have informed us that we will own nothing. The Netherlands have already started this process using the false CAGW/Net Zero scam. The WEF want us to move towards Russia and China with the ending of private land ownership.

        Net Zero is designed to impoverish the West through de-industrialisation. The enforcement of ā€œcustomer engagementā€ and ā€œbehaviour changeā€, aka the rationing of energy, food and transport, is to achieve the necessary reduction in living standards required to enable continued mass immigration.

        1. Philip P.
          November 2, 2024

          Mark B.: When you wrote ‘Russia’, maybe you meant the former Soviet Union. Modern-day Russia allows ownership of land by both organizations and private citizens. This right is guaranteed by Art. 36.1 in the Constitution of the Russian Federation.

          1. Mitchel
            November 2, 2024

            I can testify to that.We have retained our interest in a Russian commercial property portfolio,held offshore via a Dubai investment company.

      6. The Prangwizard
        November 1, 2024

        I heard Reeves saying people were buying up farm land to avoid IT.

        I thought ‘so what’. What is so horrible about that. The land would be farmed.

        She does not care about practical consequences. Her and Keir Stalin’s aim is to destroy private capital, in line with their socialist views.

        1. Lynn Atkinson
          November 1, 2024

          Then she should differentiate between farms ā€˜owned and runā€™ and farms owned by non farmers, especially when the operating profits are tiny or non existent.

    2. Peter Wood
      November 1, 2024

      Quite, as we all know, except apparently Milibrain and the front benches of BOTH sides of the House, Net Zero expenditure is an expense, NOT an investment. The best outcome for Milibrain’s spending would be to fund a couple of research grants, ONLY, in a few universities to look into innovative ways to use less carbon based energy.
      UK 10 year Gilt yield rising, costing more for government to borrow. So Ms Reeves debt binge is already kicking her sums into error.
      https://tradingeconomics.com/united-kingdom/government-bond-yield

      1. Lifelogic
        November 1, 2024

        Well:-
        1. a bit more plant, crop and tree food is on balance a net good. Furthermore slightly warmer (and it is only slighty warmer) is a net good too.
        2. the thinks Milibrain pushed do not save CO2 anyway they just export it at best.
        3. Reducing CO2 worldwide is pointless & requires worldwide cooperation which will never happen.

        Good podcast this David Starkey Petter Whittle. On Jenerick and Kemi. But Kemi is surely home amd dry. Also on two tier Britain.

        1. Lynn Atkinson
          November 1, 2024

          So not even a glimmer of hope then.
          Emmigrate!

        2. Geoffrey Berg
          November 1, 2024

          I expect Robert Jenrick will win among Conservative members. Among other things he is a lot more suave and arouses less hostility and so I expect will be more appealing to Conservative members which is just as well for them because though he isn’t up to the job, especially in the Conservative Party’s extremely perilous position on the verge of extinction (thanks to Sunak and the pre-election Conservative M.P.s who blindly followed rather than replaced Sunak before the election) Jenrick at least seems to have the will (if not the ability) to win. The best that can be said about Badenoch is that she is so erratic that she wouldn’t last long and would be replaced by somebody probably not quite so bad.

          1. Lynn Atkinson
            November 1, 2024

            +1 šŸ¤žšŸ»

        3. Peter Wood
          November 1, 2024

          Yes quite. Without doubt nature’s carbon capture is lowest cost, most enchanting, and helps feed animals and the population and provides building material.
          Perhaps Milibrain missed the science class on photosynthesis.

          PS, don’t tell Milibrain that each of us produces about 1Kg of CO2 each day, he might find a way to ‘recycle’ us!

    3. Lifelogic
      November 1, 2024

      For government – in the UK especially ā€œinvestmentā€ means piss down the drain or often crony capitalism – hose into you mates pockets, or your union supporters ones or pure corruption.

      People keep saying Sunak is a decent and honourable man as he steps down for Kemi in a day or two.

      Has he said sorry and corrected his ‘Unequivocally the Covid vaccines are safe’ statement to the house yet?
      Has he said sorry for his mad lockdowns, Covid loans and net harm vaccines that doubled the national debt?
      Has he said sorry for delivering us this appalling Government and even going six month early?
      Has he said sorry for relying on the MHRA largely funded by bigPharma as vaccine regulators?
      Has he said sorry to Liz Truss for blaming her and Kwasi for the inflation his and the BoE incompetent policies caused?

      1. Lifelogic
        November 1, 2024

        Starkey like JR supports Jenrick and trusts his Damascene conversion but is understandably worried about some of her rather dire supporter and Warsi, Hague and some even worse ones.

        But it seems Kemi as won (83% chance) if you trust the betting odds and many must by know know the result already.

  3. Mark B
    November 1, 2024

    Good morning.

    I do not know why Gordon Brown decided to change from spending to investments. Maybe it just sounded better and he wanted to give the impression that he was doing well for the country. In fact, what he was doing was circumnavigate EU spending rules (which we did not have to observe) by putting on ‘tick’. ie PPP, or Public Private Partnership. PPP Was first introduced by the Conservative government. It was designed to take the more risky parts of government spending and let private ventures take on the risk themselves. In return, they would receive money from the government for their use and, in some cases, would be able to purchase the project outright. It would cost more in the long run but, with so many of such projects going into overspend and over time costing far more, it was considered a necessary risk. A risk that was on a small scale. Labour under Gordon Brown massively expanded this in order to avoid large spending, borrowing and tax increases. Unfortunately he spent the money with the likes of the NHS and us, having to pick up the bill.

    I would therefore, regard that from taxpayersā€™ point of view, a very bad investment but a neat con trick.

    Reply I remember turning down Treasury suggestions of a PFI hospital project in Wales, successfully insisting on money from state borrowing as that was clearly cheaper.

    1. Mark B
      November 1, 2024

      R to R

      Yes Sir John. PPI or PPP is not a bad thing. It has its advantages and uses. You just have to recognise them.

      1. Barbara
        November 1, 2024

        Yes. A bit like the principle of a bridging loan: useful in some limited circumstances, disastrous in others.

  4. javelin
    November 1, 2024

    When a medical treatment goes into a ā€œroutineā€ phase it should be dealt with privately.

    So for example new glasses or regular ear wax removal.

    This also applies to handing out prescriptions, giving regular injections, performing standard operations, regular physio.

    Doctors should be used to investigate illness and prescribe a treatment.

    It would then be best for the patient and funding to go to the private sector to get a standard or regular treatment.

    1. Ian Wraggg
      November 1, 2024

      Javelin that’s one of the most sensible things I’ve read in ages. It would reduce the NHS by over 50% and the private sector would have to tout for business. I’ve just had my cataracts done and it was quick, painless and effective. Not an outcome generally seen in the NHS.

    2. Lifelogic
      November 1, 2024

      Best to use private sector doctors to just as they do for haircuts say Ā£40 for ten minutes with a GP. Same as works well for animals at VETs. With some provision for those few really without the ability to pay.

      1. Ian wragg
        November 1, 2024

        It’s Ā£75 for a private GP appointment at our local private hospital. You do at least get a thorough inspection and a detailed report afterwards.

    3. MFD
      November 1, 2024

      well , that load of thinking is ok for you rich Dicks, but for others on the bare National pension it would mean a life of even more scraping!

    4. MBJ
      November 1, 2024

      Unfortunately not many Drs in general practice can do these things. They farm out to others who understand better than a lot of them due to hands on experience.They have become consultants who don’t do much at all.We need to change to using others grounded in the basics and acquiring relevant knowledge, not stuff they will never use.

    5. Lynn Atkinson
      November 1, 2024

      People who have long term illness are the ones who need most financial help. Iā€™m speaking of really sick people, not the sick-note people.

  5. JayCee
    November 1, 2024

    At the heart of the issue here is public sector accounting. Unlike other entities, the Public Sector has not produced financial accounts that show a true P&L account and balance sheet. They have preferred to report simplistic cash accounting. Treasury budgeting does not allocate funds for long term projects separately from operating expenses. If you don’t spend it, you don’t get carry over.

    Reply There is very clear differentiation between current and capital spend in national accounts and there is a state balance sheet.

    1. Lifelogic
      November 1, 2024

      Did the costs of net harm lockdowns and net harm Covid Vaccines, the net harm net zero lunacy, the absurd HS2 project, the many worthless degreesā€¦ all go down as ā€œinvestmentsā€?

    2. IanT
      November 1, 2024

      And does that State Balance sheet show liabilities such as Public Sector Final Salary Pensions Sir John?

  6. Donna
    November 1, 2024

    Labour has abused quite a number of words, not least the word “woman,” and the Not-a-Conservative-Party has either encouraged it by enthusiastically agreeing with them or meekly going along with it.

    Investments are intended to either generate a profit, or put in place the facilities necessary to generate a profit.

    None of the Tax and Borrow Squandering included in Reeve’s budget will generate a profit, or put in place the facilities necessary to generate a profit. HS2; the ridiculous windmills; the lunatic carbon capture and the rest of their “green schemes” will never deliver a profit ….. or at least, they will never deliver a profit for taxpayers although His Hypocritical Majesty of Windsor and many other billionaires expect to make a killing from them.

    Even the so-called investment in new school buildings fails to qualify. When money is hosed at public services it is intended to lead to IMPROVEMENTS in the building and/or service and in the long run MAY lead to efficiency savings, although that seldom seems to be the case.

    “Improvement” is a perfectly respectable word and would be a more honest description of what the Government is seeking to achieve. I recommend it to next Shadow Chancellor for the Not-a-Conservative-Party, since the current one (Jeremy Hunt) is basically a Socialist who is fully signed up to the abuse of language Labour deploys.

    1. Lifelogic
      November 1, 2024

      Indeed Hunt and Reeves and both PPE socialists with zero understanding of economics or indeed climate, CO2, finance or energy. Hunts not quite as bad as Reeves but very nearly. He was a dire Health Sec. for many years too failing to reform the appalling and rationed health system.

      1. Lifelogic
        November 1, 2024

        Hunt did not even try to seriously reform the dire NHS. He was however very good at saying sorry for the endless gross negligence deaths, maimings & failures in maternity wards, blood contamination and indeed all over the place – but then he did get loads of practice at this.

        Where does Hunt stand on the clearly unsafe conviction and refusal of any right to appeal for Lucy Letby? I suspect he is not on the sensible David Davis side.

  7. Lifelogic
    November 1, 2024

    To reply indeed PFI were absurd mainly just to pretend you were not borrowing so much when you were, in effect, jist borrowing and at higher costs and far less efficiently.

    ā€œInvestingā€ sounds better than ā€œpissing down the drainā€ but with government the latter is almost invariably far more accurate.

  8. Narrow Shoulders
    November 1, 2024

    It could be argued that we are investing in legal immigration as these fine, upstanding arrivals will help drive our economy in years to come.

    That statement is as likely to be true as Rachel Reeves’ massive spending spree is going to generate a better, more prosperous country.

    It is not Government’s money. They have to take it off someone before they have any (latterly by excessive borrowing). Government should decide on its few priorities and get out of the way for the rest. Ā£35 billion for housing benefit? Ā£191 billion for NHS, Ā£41 billion for Scotland, Ā£17 billion for Wales.

    1. John
      November 1, 2024

      Every time I see mention of the NHS budget it has risen by more than Ā£10 billion per annum since the last time I saw reference to it.

      Not that long ago its budget was said to be Ā£120 bn per annum so Ā£190 bn is a 60% rise in relatively few years. Sheer funny money but it’s not funny that the ‘healthcare’ system is becoming less and less effective over time. At this rate we’ll soon be devoting 20% of GDP to it and we’ll be ‘level’ with the USA. It has the highest ‘health’ spending and the lowest lifespan of almost all developed countries. If you believe the figures even Algeria has a life expectancy one or two years more than the USA.

  9. Sir Joe Soap
    November 1, 2024

    Well you have to look at what the investment’s value is on the market, surely, to add it to the balance sheet. It is disingenuous to start adding in assets which can’t be sold. On the PL the cost of Repairs and Maintenance in this country boots it into loss. Much of training, education, health is a maintenance cost. Some R & D can be considered a speculative investment, but a business chewing up cash like the UK wouldn’t normally be able to afford any but the sure bet R and D.

    1. Mickey Taking
      November 1, 2024

      Assets don’t have to be sold, but they ought to produce a value over a working life. Stock is something you might hold for appreciating over time, or trading at a margin.

  10. Berkshire Alan
    November 1, 2024

    The Government have a track record of changing meanings.
    “Investment” for what is borrowing, and of late “Irregular” for what is Illegal.
    They seem to have never heard of the phrase “return on capital employed”
    I see it is being reported that the head of the new Value for Money Department, is being paid Ā£50,000 a year, for one day a week. !
    Just about sums it all up really, I wonder if they will work from home as well ?

    1. Lifelogic
      November 1, 2024

      I think he came from HS2 so clearly he should know how not to deliver any value for vast sums of money.

    2. Lifelogic
      November 1, 2024

      David Goldstone CBE

      A Treasury spokesperson said: ā€œDavid Goldstone is a highly experienced public sector leader with a track record in delivering complex high value programmes and will bring independent rigour to the government’s approach to improving value for money.ā€

      Well we shall see. The past projects he worked on were not noted for being sensible or good value to say the least. Sounds a bit like Osborne tax simplification office that doubled tax complexity before it was shut down.

    3. Bryan Harris
      November 1, 2024

      +1

  11. Robert Bywater
    November 1, 2024

    Madam Reeves is cracked up to be an economist so she should understand that.

  12. Donna
    November 1, 2024

    We can all be comforted by Labour’s “investment” in a new back-covering Quango and the “highly credentialed public servant” appointed to lead it. Based on his track record I think we can all predict what the outcome will be (rather like asking Prof Neil Ferguson to model potential casualties from a virus):

    David Goldstone, Labourā€™s newly appointed ā€˜Value for Moneyā€™ tsar will be paid the equivalent of a Ā£247,000 annual salary, despite a track record of overseeing projects beset by delays and spiralling costs, including:

    1. the London Olympics – costs spiralled to Ā£9.35 billion, almost 4 times the initial Ā£2.45 billion estimate.
    2. the London Legacy Development Corporation, where projects including the London Stadium and East Bank cultural district reported cost overruns.
    3. Chief Operating Officer at the MoD between 2017 and 2020. The Commons public accounts committee said the following year that the MoD had been guilty of ā€œrepeatedly wasting taxpayersā€™ moneyā€, and a Labour report identified Ā£4 billion of waste.
    5. More recently, he was criticised by the Public Accounts Committee after taking a Ā£168,000 bonus on top of a Ā£311,000 salary for overseeing non-existent renovation work on the Palace of Westminster.

    Obviously just the man for the job of overseeing the squandering of Ā£billions on Keir-Ching! and Reeve’s lunatic “green investments.”

  13. David Cooper
    November 1, 2024

    In summary, the only correct usage of “investment” is where the money in question is applied with a view to profit, whether definite (e.g. building society interest) or speculative (e.g. R&D on a new product to be brought to market).
    Under this government, it would not be at all surprising if they had the brass neck to describe their spending, subsidising and squandering as “social investment”. We all know that this adjective frequently serves to destroy the natural meaning of the noun to which it is attached.

  14. Nick
    November 1, 2024

    The first thing a potential investor asks is whatā€™s the yield. Next whatā€™s the risk. Then whatā€™s the security, and last – if heā€™s savvy – how much of his personal cash is the seller investing.

    MPs should make sure they have answers before bunging Ā£19bn of other peopleā€™s money at an untried solution to a non-existent problem.

  15. Ian B
    November 1, 2024

    In the US Biden and Co came up with the Inflation Reduction Act, in essence it was to use Taxpayers money to kick start the economy. Growth over the last period (HoC data) the UK 1.1% of GDP the US 2.8% of GDP, since 2019 the UK 2.9% the US 10.7%.

    The real difference between the 2 is that the US circulates taxpayer money around the economy stimulating it and it ends up back at source releasing more money, lowering the costs. The UK exports Taxpayer money, the UKā€™s wealth, to prop up foreign regimes for it not to return, adding substantially to the UKā€™s cost. A taxpayer hand out in the US goes to US domiciled entities, a taxpayer hand out in the UK just leaves the Country.

    Red Edā€™s aspirations all focus on buying from foreign entities, foreign energy supplies, foreign equipment for energy and so on. The Chancellor has just announced greater funding for the Chinese Auto Industry, more funding for foreign produced heat pumps. An endless list of foreign ā€˜firstā€™ purchases. They confuse assembly with manufacture, they confuse ownership and the real recipient of Taxpayer money. It is not that the UK canā€™t produce what we need, but UK enterprise isnā€™t allowed to get out of the starting block as there is no price vs cost provision in Government expenditure. In fact, as we all know there is no control of Governments expenditure of our money ā€“ just spend it.

    Taxpayer money to become investment needs to fund the UK economy, to trickle down at every point into the economy – what goes around should come around. That way cost reduce, there is more to go around and the economy grows more released into the UK base. Exporting Taxpayer money for it never to return, to never end up in the economy is just plain dumb.

  16. Keith from Leeds
    November 1, 2024

    Up to 1997, we had a government that controlled spending, not perfectly, but to some extent and reduced the UK debt. From the arrival of Blair/ Brown and Labour in 1997, that all went out the window. Brown destroyed the UK’s private pension schemes in his first budget. Then, over the next 13 years, they spent stupidly and ran up the UK’s debt to the point there was no money left in 2010 when the new conservative/liberal coalition took office. Sadly, Cameron/Osbourre never got a grip on spending and ran deficit budgets, following the shocking Labour example.
    Today, Labour starts from a much worse position but does the exact opposite of what is required!
    The PM, Chancellor, Ministers, and every Labour MP have no idea how to run a modern economy. The budget and the stupid pursuit prove it. What a shambles in 4 months, how bad will it be in 4 years?

    1. Original Richard
      November 1, 2024

      KfL : “What a shambles in 4 months, how bad will it be in 4 years?”

      As bad as they think they can get away with.

  17. Keith from Leeds
    November 1, 2024

    the last line should read Pursuit of Net Zero prove it.

  18. glen cullen
    November 1, 2024

    230 criminals arrived in the UK yesterday from the safe country of France ā€¦.when will it end ā€¦.when we return one to France

    1. Mickey Taking
      November 1, 2024

      Starmer insisted he would stop the boats, is it that you don’t believe him?

      1. Original Richard
        November 1, 2024

        MT :

        Starmer didn’t say he would “stop the boats”. He said he would “smash the gangs”. Perhaps his plan is to open our borders completely to put these gangs out of business.

        Just as Sunak didn’t say he would stop illegal immigration. He only claimed he wold “stop the boats”.

        The majority of politicians are lawyers and hence it is necessary to analyse their statements very carefully like checking a contract.

  19. Chris S
    November 1, 2024

    Can our host please address the deeply troubling developments over the Southport murders I refer to reports particularly in the Daily Telegraph.

    There is now little doubt that Mrs Balls and the PM withheld vital information about the case for several weeks and Nigel Farage has laid bare the attempts by both government and the Speaker to continue this (dispute Ed)through PMQs this week. Regrettably Richard Tice fell into line and there seems to be an element of withdrawing parliamentary priviledge over MPs wishing to question ministers about this extremely troubling case.

    I wonder how Nigel would have reacted had he been selected to ask a question? I would like to see government and commons authorities try to impede his parliamentary priviledges !

    Together with the ridiculous sentences handed out over the so-called riots, we seem to have entered into a period where government thinks it can pull the wool firmly down over the peoples’ eyes etc ed

    Reply No I will not be writing about that case as I have no knowledge of what Ministers knew and have no wish to impede the criminal law. MPs need to pursue this as they have direct access to the Ministers and have privilege for what they say.

    1. Donna
      November 2, 2024

      Nigel would not disobey an instruction from the Speaker. He would “work around it” like Richard Tice did.

  20. mancunius
    November 1, 2024

    The Labour government is only interested in investing in Votes – more votes for the Labour Party. This is behind every fiscal, legislative and political decision it has made since July.

    1. glen cullen
      November 1, 2024

      Bilston North (Wolverhampton) Council By-Election Result: Thursday 31st October 2024
      āž”ļø Reform: 34.8% (New)
      šŸŒ¹ Labour: 25.1% (-46.1)
      šŸŒ Green: 23.4% (New)
      šŸŒ³ Conservative: 13.7% (-15.0)
      šŸ”¶ LibDem: 2.9% (New)

      1. Donna
        November 2, 2024

        Yes ….. the rump of Conservative voters in the Red Wall seem to be working out that the way to get rid of Labour is to vote for Reform. Let’s hope this is the start of a trend.

  21. Peter Gardner
    November 1, 2024

    Calling expenditure an investment is an age old socialist trope to persuade people who do not understand the difference in either business or accounting terms – most people – that they are not wasting money. It works. Take potholes. Mending them is a business expense in labour and materials and claimable against tax on the contractor making the repairs. For the local authority, which doesn’t pay tax, repairs are a running cost, an operational cost. But repairs also increase the value of the capital investment by taxpayers that is the road and increase its utility in the long term and extend its life. Investment or expense and from whose perspective?

  22. Agapanthus
    November 1, 2024

    After all, what is British government policy?

    To get rich quick like Tony!

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