CCR2 Risk, data, and GDPR Planning for the long term
Labour is proposing a long-term economic plan based on long- term planning via investment and renationalisation
Bill Esterson Shadow minister for small business
billestersonmp@gmail.com
And Mr McDonnell was also right to
review PFIs. Some of these schemes really have been a licence to print money. That money, which could and should have gone into delivering services, has been spent on interest and on fees for setting up or selling on PFI schemes. One hospital PFI scheme was sold for a profit of £12m just 48 hours after being agreed with the government and that example is all too common. So if there are PFI or other private finance deals, which could be returned to the public sector to save money, why would the government not do so? Because that is what a business would do.
It would review existing finance arrangements and it would re-negotiate them to improve the financial arrangements. I said that bringing services back in-house
was part of a long-term approach to public finances. Here is why. If it is costing the exchequer or local councils more under current private ownership than it would if the public sector took over ownership, it means a better use of funds. It is a more sustainable approach to financing of services. But it also means that investors can think about a longer term more certain approach too. Because if we replace shares with bonds, which is how ownership may be transferred in water for example, those bonds would still pay a return. The difference is that, yes it might be a lower return than dividends, but it would be a long-term return and a guaranteed return, depending on the types of bond. We also have ambitious plans to invest
in road, rail, broadband, skills and other infrastructure such as housing. All these investments are key to our national infrastructure and to the success of firms
November 2017
money borrowed after the war was repaid 50 years later. It worked then and can work now by taking a long-term view. Investors have raised concerns about what
Government debt is over 80% of GDP. After the Second World War, it was more than three times higher, yet millions of council houses were built as well as other vital national infrastructure, all the while that the NHS was set up
and the economy. And they all need long- term investment, patient capital. Our plans include the creation of a
National Investment Bank, which would see match funding of public and private funds to deliver priorities. And the level of investment, £250bn over 10 years from government and a similar amount from the private sector is the figure requested by the CBI. Hardly the reckless levels of borrowing claimed by our political opponents. I ran a business for 15 years and I know
that businesses borrow money to invest against a business plan. It is the same for government. If the plan is right, if the returns on investment pay for the cost of borrowing and deliver an acceptable return on top, then the plan is sound. Government debt is over 80% of GDP. After the Second World War, it was more than three times higher, yet millions of council houses were built as well as other vital national infrastructure, all the while that the NHS was set up. The
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we have announced because they fear that returns will be lower in the short term, but those same investors also want and need infrastructure and public services that are short of investment right now. Government and business needs to work together with our unions in public and private sectors to deliver in the national interest. An economy that thrives is in the interest of businesses and workers, of private and public sectors. High pay helps workers and it helps firms too as it means more money to buy goods and services. Government’s job is to deliver the infrastructure, including skills for employers to succeed, to raise productivity and to create the high paid future that is essential if we are to reverse the more than decade long decline in living standards faced by many people in work or on pensions. On the continent, governments own the
monopoly utilities. They ensure investment in infrastructure delivers transport and broadband. They encourage investment in renewable energy, which has very long-term consequences in addressing our carbon footprint and combating the threat of climate change. Yet in the UK we are reluctant to take the long-term view. Perhaps what Mr McDonnell and Mr Corbyn have set out is the start of a change of approach at home. Labour captured the imagination of millions of voters in the 2017 election and continue to do so. I hope that investors will see the opportunities and strengths in taking long- term, patient approach and will not just consider the threats and weaknesses of an end to excessive returns. CCR2
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