Vampire squid state capitalism – a debate on the Private Finance Initiative

My colleague Jesse Norman MP has done some fantastic work towards obtaining rebates on exorbitant private finance initiative (PFI) contracts. See for example his article It is time to derail the PFI gravy train. To that end, yesterday we held a lengthy debate in Westminster Hall which you can find here.

PFI really matters to Wycombe and Buckinghamshire, where long, expensive hospital contracts have become fixed points in the local health system. A sensible, negotiated rebate would help NHS staff deliver more.

My colleagues did a fine job in explaining the minutiae of PFI and its faults so I tried to widen the debate to encompass PFI’s place in our present social system:

I would like to develop one point: how PFI fits into the nature of our society. I am reminded of something that Churchill said, which I think speaks to the third way. He said:

“Some people regard private enterprise as a predatory tiger to be shot. Others look on it as a cow they can milk.”

I will come back to how he finished the quote at the end. It strikes me that the third way seems to have turned private enterprise into a vampire squid to be suckered on to the faces of people on normal and low incomes.

It is strange that so much money is being funnelled to firms whose commercial risks are being underwritten by the power to tax. Far from protecting the poor, the state now seems to be an institution for protecting the rich from the risks they take with their own investments. I am a capitalist, and I believe that capitalism requires entrepreneurs and investors to bear their own risks. Somehow, through all this mire and mess we find ourselves in, we need to recover the principles of a free society and a vision of a capitalism that works, and works for everybody.

The worst part of the present system of vampire squid state capitalism is of course the banking system, but PFI as recently executed is in there too. The Treasury has made a start but there is far to go before PFI satisfies the public’s incisive sense of fair play.

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Comments & Responses

One Response so far.

  1. Marlene Jones says:

    The sooner this scandal is brought to the attention of every single UK citizen who are entitled to know why the UK got into this mess the better it will be for everyone the labour government avoided a public inquiry of its own frauds by bailing out the banks which funded these frauds with the taxpayers money and having paid a very high price already we are now having to pay for years to come and it is about time someone did something about getting back our money from off shore tax havens owned by fraudulent companies and their corrupt bankers and their corrupt professional advisors who advised the government on this corrupt policy.

    The Irish government is more honest and is debating what caused the demise of their economy and is recovering substantial assets obtained by fraudulent companies which defrauded their banks catching corrupt bankers and other corrupt professionals in the process our police are not up to the job and the SFO only does what the government tells them to do consequently the SFO does not investigate any fraudulent companies on whose board of directors sit some very prominent people with connections to the government who are profiting from these schemes who avoid a fraud investagetion by putting their fraudulent companies into voluntary lquidation to protect their hidden assets the moment a potential fraud is discovered…