Is Labour planning to do PFI again?
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- Опубликовано: 1 июл 2024
- The private finance initiative was one of the worst legacies of the last Labour government. It was a massively expensive attempt to avoid incurring government debt. We’re still paying the price. And it’s looking like Rachel Reeves might be planning to do something similar.
#uk #election2024 #economy #politics #labourparty #vote
ABOUT RICHARD MURPHY
Richard Murphy is Professor of Accounting Practice at Sheffield University Management School. He is director of Tax Research LLP and the author of the Funding the Future blog. His best known book is ‘The Joy of Tax’.
This video was edited by Thomas Murphy.
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Pfi is privatisation but not obvious to the public
@@keithparker1346
It's worse than privatisation because we're locked in to T&C's we pay through the nose for on everything as well as not owning any of it
Public paying for overpriced private assets.
Keir Starmer is courting Blackrock, Its going to be worse than the rubbish PFI contracts.
That's bad news, Blackrock are taking ownership of vast amounts of once publicly owned infrastructure !
The entire G7 is courting BlackRock, they were invited to attend the last summit in Italy. Larry Fink made a presentation to them. So that they understood he could save them. You can find video clips online. This "PFI" is a trend that accelerates our return to Feudalism. The "PFI" term is just one of the most recent pieces of doublespeak to describe a mechanism to finance a bankrupt kingdom. Just like the old days.
Absolutely spot on, it was a disgrace that they used it first time and it's madness that they are going to do it again.
A ruse to keep the debt off balance sheet but we pay through the nose for "rent". We are already owned by corporate interests. Time for real democracy.
Exactly right David.
Unfortunately, we've never had a proper democracy in this country. Technically it's a Constitutional Monarchy. Don't miss the truth buried in that. It's all about the establishment remaining established. Our Upper House (House of Lords) is an unelected "self-governing" body and has become so big (about 800 Lords now) it ranks as the largest unelected government body on the planet second only to the Chinese Communist Party's National People's Congress.
PFI was a disaster for London Underground through PPP. The tax payer footed the losses - nearly £1bn.
Too right! I worked for TfL Customer Services all through that fiasco. We minions all knew that Ken Livingstone's proposal for funding the Tube upgrade through a special bond issue was a much better idea. Anybody interested in the details of the sorry story should start with the Wikipedia entries for Metronet and Tube Lines, the two short-lived companies created to carry out the upgrade. And today much of the planned upgrade has still not happened.
Labour is economically illiterate. I was a publican when all that PFI insanity was going on. And to me, as a publican, it was blindingly obvious that it would blow up down the line.
P.F.I. was disastrous.
Jeremy Hunt tried to close the vital Lewisham Hospital in South London when he was the health minister because it was the only one in South East London that was not on P.F.I.
Lewisham Hospital was all paid for.
The huge debts of P.F.I. compared to govt borrowing were just naked corruption.
Its a way of rewarding your rich party sponsors with public money.
And probably receiving some of the cash siphoned back to you.
Think Brighthouse on steroids. Over charged for goods that fall apart before finished paying for them. PFI in a nut shell.
Labour - crippling Scotland as always
Next PFI - GB Energy
PFI puts money in the hands of rich companies to the detriment of government finances. Moving debt from the government's accounts to a PFI where the government is committed to paying even greater sums to the PFI does not rid the country of the debt and is no more than financial chicanery. Under a previous PFI I recall that a hospital was built where the doorways were not wide enough for trolleys to pass through.
We will have more Carillions and unfinished projects, what could possibly go wrong 😢
I hope not. PFI got projects underway but at too high a cost. PFI has contributed to the breaking of our education and health systems. Private equity will asset strip the country of whatever assets we have left.
So many parts of Scotland are still paying for this now.
Maybe Starmer can quickly pop up and reassure the electorate that he's not going to allow his henchman Streeting to sack the head of NHS England and replace him and his department by other private health interests...
He's bought and sold for Private Investors gold!
They will never learn which is not help by their very short memories
😡😡😡
KEEP PFI/PPP OUT OF SCOTLAND!
As soon as Labour announced their Great British Energy plan, it did appear that PF! was back again. Yet another way to fulfill their 'Public cost, private profit' dream.
Government by Blackrock... what could possibly go wrong.
Please no repeat of PFI. It’s a rip off
It is not such folly if you are actually one of the shareholders of the private equity company who is going to benefit. Never trust a politician.
Anyone who knows how to balance their own household income would never have touched Pfi never mind what Reeves has in mind.
Everything shows that not a single one of them should be in control of public spending and finances as they can’t live within their means in their well paid jobs without dipping into taxpayers pockets that the general public would be embarrassed to claim, I say shame on them all.
Anything to keep the debt off the books.
Debt on the books of a sovereign country with a fiat currency is greatly misunderstood, just have a look at how Japan financed its rise from the WW2 grave using the Window Guidance system, a system that came forcibly to an end when they signed the Plaza Accords with the US, France and the UK. Have a look at the first half hour of the documentary "Princes of the Yen" here on RUclips to get a idea of it.
@@vgstb We are not Japan.
Our savings culture is muted.
@@stephfoxwell4620 Nothing to do with our savings culture, whatever that is. It how the economy works.
@@helenheenan3447 I thought the Japanese save way more.
I have the pleasure of working in a PFI hospital and it's a massive rip off for the tax payer and prevents us providing a better service for our patients.
It was always about off balance sheet accounting first and foremost, Gordon Brown being too clever for our own good.
So yes we should fully expect more of the same. The fact that Reeves used to work at the BOE is warning enough. Just ask David Blanchflower.
I would like to know why labour are thinking of putting black rock in charge of our vital infrastructure?
They’re a private company that puts its investors first.
They have a record of not delivering value for money and leaving services worse off.
Black rock will privatise Britain with our tax money as a sweetener.
I have awful memories of PFI and the overspend that cost the public dearly, paying extortionate amounts to private contractors that built, designed and financed public services like prisons, schools and hospitals before handing them back to the state, often in very bad condition.
Big finance plan to own our infrastructure outright to generate profit and steady revenue, that really should belong to the public.
We should not tolerate the government handing out public services for privatised infrastructure.
Black rock has already bought £1.4 billion of rental homes and non performing mortgages from Vistry in the uk alone.
This has delivered higher rents and displacement of lower income tenants.
There’s already been big pushback against institutional landlords from Copenhagen to Berlin, Dublin and Madrid.
The state should be building new public housing not black rock.
This investment by black rock also makes it much harder to bring public goods back into public ownership and allows private finance to tighten its grip on the social contract with citizens to become the ultimate arbiter of climate, energy and welfare politics which will have profound distributional, structural and political consequences.
Black rock has already lobbied heavily against fossil fuel regulation it is highly likely that our future energy costs could spiral under black rock and could embolden anti green movements that tie into authoritarian and right wing politics.
Labour need to answer these questions and I come at this as someone who’s father was a die hard labour supporter in the 70s and 80s.
We need to plan creatively for the future and not let private investment suck public money from our trough like pigs.
If we have to shoulder the costs I’d rather pay more in tax to get things done than have black rock sponge out money for little return.
Also the tories are knee deep in black rock, Sajid Javid works for them, and so did Jeremy Hunt.
This isn’t a tribal issue it’s a national one, we should either be prepared to pay more tax to dig us out of the mess the tories have left, or have black rock run our lives.
@@RoofLight00 This is why the domestic economy has been systematically destroyed. Total corporate ownership has been the plan for a long time.
Why can’t we just print the money?
Exactly
how do we borrow more without telling anyone we are borrowing more....
Call it something else.
History is there to teach us and we should learn from it
It's a pay day loan.
Good video, we need to write to our new MPs and ask for assurances that PFIs will not be returning.
Just to add for balance that Labour have not initiated this.
They are ‘thinking’ about the options.
We should tell them to vigorously reject the idea.
It's a done-deal mate. too late.
I find your segments very interesting and informative
I very much hope you will continue to provide these analyses
Wish you good luck in building up your audience over time
PPPs .PFIs can also lead to higher regressive user pays charges which disproportionately impact the poor.
Another disaster in the offing, do they ever learn😢
There's nothing to learn. They're doing it out of complete self interest. This way they can claim they stick with their stupid 'fiscal rules' despite loading even more debt onto our future than if it was just cheap government borrowing. They know it's a poor exchange for us as a country but as long as makes them look better short term to those in ignorance then they don't care.
Public Finance Insanity for the financially insane. You know it makes nonsense!!!
100% definitely happening. Probably at worse terms for the public but better terms for Rachel Reeves personally.
Yep, Guarnteed reward for those selling the public down the Swanee.
Great video Richard, keep them coming your work is great;-)
Well now we can see how they'll avoid raising taxes.
Hi Richard J Murphy, thank you for doing this video describing the real costs of PFI and the long term debt burden it has caused, actually there is quite a lot more to it than just the monery, the increased layers of management and administration have also added much to the total costs but there again the worst aspects are the ridiculous difficulties when getting the repairs and maintenance work done at all let alone properly.
I have been fascinated by the gradual degradation of public services over the last forty years it has never been easy to establish any singularity of cause, it is clearly the product of a number of factors with ideological principles but one of many.
It is now very clear that the powers that should not be have a very poor grasp of reality, obsessed as they all are by their political convictions, much the same applies to the culture and style of 'modern' management where none of those taking senior positions in management are required to demonstrate any competence or qualification, just as with our politicians simple desire to take the job is considered adequate.
As a long term operator of a one man business in the construction industry I have long understood that effective and sensible management of my business was both essential and very difficult!, it has taken me many decades to learn how to consult and consider the help of others around me, like every body else just because I wanted to make all the decisions that did not make me able or effective!, consultation and collaboration was and is the only way forward, it is never a case of right or wrong only of finding effective workable solutions from any available source.
Cheers, Richard.
Labour needs to appoint a dedicated Transport Commissioner for West Yorkshire to match the Greater London Authority.
Currently, the Transport for North CO serves a number political madters and is therefore absolutely ineffective in running transport in each region.
Worries me too. It’s a license for the private sector to write cheques for as much as it wants.
Depressing!
What would you say about a system where the government built infrastructure - schools and hospitals - fixed price procurement only - and when built sold them to UK pension funds so they could reap the rental income? Say at a 5% yield? That way both the debt and the asset are removed from the government balance sheet immediately. The government is then free to move on to the next project without rasing the overall debt ceiling. These assets should be built with UK national materials only i.e. labour and equipment. Thus promoting UK employment and manufacturers.
At the time PFI/PPP was off the public balance sheet. It's not now.
Why not call it out for what it is? Class war.
Yes
PFI , oh itll be coming back and theres still a load of these schemes in place.
Excellent
.
Wow! I don’t often totally agree with Richard, but on this subject we are as one. I am starting to like him. The reckless expansion of PFI usage resulted in financial millstones for hospitals and schools and was one of the main reasons I fell totally out of love with Labour in the mid-noughties , after celebrating their 1997 win. (The others were 1. Gordon Brown killing off a pension provision system that was the envy of the world. 2. Selling the country’s gold reserves at rock-bottom prices. 3. Continuing to increase public sector wages, with no corresponding increase in productivity, while equivalent wages in the private sector were already static. 4. The settlement with doctors in 2003 that involved far more money for less actual work.) I definitely don’t trust Labour not to mess things up again, but last time I didn’t see it coming.
But did PFI ever go away - I assumed it was still ongoing since Blair introduced it
PFI was a Tory conception by Major, birthed through surrogate in Blairs womb then shat out by him and Brown and every neoliberal government since.
Nothing screams, we need a change of course more than the reheating of old ideas.
Allegedly Reave has got a brain and knows about pfi,,so why will she go ahead with it.?
Governments used to issue bonds to raise money. In spite of lower returns than equity, certain investors were happy to take the certainty of their return, and avoid volativity. I really hope that we aren't making the same mistake again.
Sincerely hope RR isn't taking this route. Has she not seen what private equity has done to the already messed up American health care systems
I worked for an Architectural Design company that won many PFI contracts for Hospitals and Schools.
It was a great short-term success for the company and many others.
Lots of money was made by a relatively small amount of people.
It was a great illusionist quick-fix trick used by Blairs Labour party.
Spend today, and let future generations worry about how to pay for it in the future.
A £200 million project would, in reality, over time cost more than £600 million in repayments.
It did not avoid incurring government debt.
It simply kicked the debt down the road for others to deal with.
It left the country with a horrendous long term debt that is still being paid off today.
But the illusionist trick worked.
I am sure Labour will be more than happy to perform it again.
But, I have to be honest.
I don't think any of the other mainstream parties would be averse to doing the same thing.
Especially the Conservative party.
It made many private companies a lot of money.
It still is!
Misses the root cause of the problems with PFI….. poor procurement by the NHS, Schools and other agencies…… the disaster is primarily of their making…… they designed the contracts…… they identified the scope…… they signed off on these deals….. they contracted with dodgy partners like Carrollton….. they chose the tendering companies…… they failed the taxpayer
PFI also comes in with tied contractors too, if they are crap/exensive you can't get rid off them
Well the tories are already doing pfi big time.
The student debt timebomb is going to start going off too, all that debt transfered back to the taxpayer. It's not written off, the liabilies are assumed by the state.
Another vital video.
A sovereign government with its own currency, Central Bank and Treasury can just create money then spend it into society.
Targeted and with care.
That is one of its main duties.
Do you not think that Rachel Reeves plans PFIs for Social Care, British Energy, massive housing contracts and National Rail? I think that Keir Starmer's interviews have suggested this.
The thing with PFI is, the maintenance doesn’t get done and the Private contractors don't spend a penny.
A few health care buildings in Lothian and Borders are coming to the end of their contracts and they need big money spent to bring them up to a standard. Money the contractors are withholding. . Where will the money come from for essential maintenance?
Oh this sounds so bad , hope it’s not history repeating itself.
Labour should have been setting up the narrative that borrowing for public infrastructure renewal is an investment which benefits the country. In turn, public sector employees should be paid a respectable salary, which could help staff retention, which leads to better stability and is cost-effective to the public purse. Instead, it has run scared of that narrative, returning to the failed old PFI policy which only benefits the moneyed corporations who will be laughing at us as they get rich at our expense.
Disaster then as now..
Excellent contribution Richard. It boils down to a short term accounting trick to keep the debts off the government’s balance sheet but which ends up costing much more in the medium term and lines the pockets of the contractors. (The same perverse logic applies to student loans). The answer is ….. I’d be interested in your views on ‘modern monetary theory’ as an alternative approach!
I read the article in the Grauniad yesterday. I was surprised they ran it, considering how far up Starmer's behind they are. Is it just a diversionary scare story? Trouble is, I think it's right up Rachel Street Porter's alley. She can pretend she's getting things done and her city mates make a heck of a lot of money.
I'm so happy I made productive decisions about my finances that changed my life forever,hoping to retire next year.. Investment should always be on any creative man's heart for success in life .
Thanks for the advice! I'm new to financial planning and wasn't sure where to start. Any tips on finding a reliable financial adviser or resource to guide beginners?
As a beginner, it's essential for you to have a mentor that is verified by finra and SEC to keep you accountable. I'm guided by a widely known financial consultant Stacey Macken
Stacey demonstrates an excellent understanding of market trends, making well informed decisions that leads to consistent profit
I remember giving her my first savings $20000 and she opened a brokerage account for me it turned out to be the best thing that ever happened to me.
Yes I can believed that, I got victory with her, was so sad after receiving the first pay knowing I invested so low with fear
Yes.
Its a dead cert.
I imagine this sort of model would be okay for niche or higher risk applications, but it makes no sense for commodity and low risk sectors.
This is why I will not vote tactically; where is the real change? My own trust is saddled with huge PFI interest payments. We are also having to 'save' £50 million just this year. That is having real consequences for front line services - they have even got rid of an executive post (that's how you know it's reeeeeally bad).
I'll be glad when this election is over. All this project fear of change is getting tedious beyond belief.
If they can't borrow and they can't raise taxes and they need to increase growth, PFI seems an option although an expensive option.
Sometimes you just have to bite the bullet to get things started
Don’t we pay private contractors a return on PFI investment projects.. with secure government bond interests.. & isn’t a bad investment strategy..but it’s those chairing or in control..corrupting & skimming off this workable ideal.. 🤔🤔🙄
Rumours? Perhaps wait for the facts? Personally I’m no fan of PFI, although it does have some advantages, but I’d be surprised if we went down that route
I'm expecting something similar to the VIP lane PPE scenarios where the government overpays companies (board members being family or donors purely coincidental of course) to fill gaps in services that could take the same money and stretch it further.
Much easier to spin as a way to "save the NHS" if privatisation is done through the back door and the media have been happily throwing the service under the bus for years in preparation.
I worked in a couple of PFI financed hospitals -the build quality was absolutely dire and I believe a lot of schools and hospitals built under the scheme had RAAC concrete floors/ceilings ;even though the shortcomings of RAAC had been known since the 1930’s.
Interesting fact
-estimated useable life of a PFI built hospital/school etc…Thirty-six years
-average length of a PFI contract well there’s a thing! ….Thirty six years!
Is it planning PFI? Err, yes they clearly said so in the manifesto, with GB Energy, National Wealth Fund, British Infrastructure Council, etc..
Is it practical for Govt to do it themselves? Err no, servicing the debt pile resulting from the bursting of the PFI/property bubble in 2008, is already soaking up a huge proportion of tax revenues, constraining spending on the NHS, defence, etc..
More lending would be adding fuel to the fire & hastening the day when international funding of gilts dries up & interest rates have to soar to attract domestic funding. Which would suck capital out of private industry & commerce, with consequent deterioration in growth, employment & the tax base.
The sort of downward spiral that happened to Argentina. And it's the sort of thing the bond markets & BoE would very strongly deter, as we saw with Liz Truss.
Allowing the property/PFI bubble & 2008 Crash to occur has passed all power to such, and it's no use howling at the wind about how 'unfair' having to revert to PFI is.
I also wonder which private energy companies will be asked to get on board with the new GB Energy initiative Labour are proposing. The energy company that really isn't an energy company. Starmer has admitted this on Scottish Radio. The government will simply occupy its place as a finance management vehicle, underwriting what would otherwise be seen as a risky undertaking by the companies involved. I place my bet on Ecotricity being in line for participation, seeing as their CEO, Dale Vince, has already donated £1.4 million since 2014. Just saying.
Perhaps I was involved in one that was atypical. I am proud to have been involved with the Broadland Flood Alleviation Project. The works carried out could not have been justified without packaging them as they were. If my understanding is correct should the cost to the tax payer have ever got out of hand then the private sector joint venture company would have been embarrassingly penalised. I agree that in theory government should be able to secure borrowing cheaper than the private sector. I also believe that without shareholders to appease the public sector should be able to undercut the private sector when tendering for such work.
Thanks for this piece of history.
Are you worried the King will abdicate like Edward VIII?
But private investment makes everything more efficient, somehow.
Is Sir Bliar Starmer’s independent party anything to do with the Labour movement, as correctly represented by Jeremy Corbyn ?
I believe this is the only way they can get anywhere near the net zeropolicies. The grid engineers estimate £3 trillion for the renewed green grid, that will hopefully take us through to 2050. The repayments will be colossal. Similarly to give grants on property upgrading will cost £5.5 trillion according to trials done by govmt and Cambridge university. Then EVs charging along with increased supplies will be trillions and increased supplies for replacement of fossil heating and hot water. 100 Gigawatts Capacity will need to become 400 Gigawatts. Where is all this coming from ? If PFI then we will be in hock to trillions and tens of thousands per head. Of population We will” literally be owned by private corporations or destroyed by debt.
Well, that's labour for you.
Conservatives have done exactly the same.
TweedleDee is no better than TweedleDum.
If you think Conservatives are more "fiscally responsible" than Labour you are delusional.
Yet people still wonder why I am voting Green rather than joining in with tactical voting
I know they won't win my constituency, but if everyone waits for a change, nobody will change anything. I am helping grow the Green vote so we have an alternative to PFI and subcontracting!
Well said, we have to start somewhere. Tactical voting is a con, and Vorderman who promotes it is too.
So overt Marxism instead.
@@stephfoxwell4620 is this a parody comment?
@@markwelch3564 No.
The Greens are despicable.
Far left extremists.
I voted Green rather than a tactical vote, too. At least I can sleep at night knowing I did the right thing.
Can you make a video about why no government ever implements your economics please?
@Chat___with___Richard.J.Murphy
That profile picture is of Professor Wolfe. Are you working together?
Wtf is going on…. We are heading for a shit show.
banana republic
Of course they are. There's no money and they are desperate to be seen to do something.
Labour will f___ this country over from day one.
You use the word rumour a few times then go on to speak that those rumours are fact, mmm. Why have we not heard about this for decades? I remember the PFI conversation back in the Blair years but not since. I suspect you are just presenting your own opinions as established facts. Your channel so do what you wish of course but not everyone is buying it.
Yes.