The solution according to Peter Hain

Instead, Britain urgently needs sufficient public and private investment to deliver high-quality infrastructure, millions of new houses, high skills and the cutting-edge technology to sustain a competitive, productive economy.

Not some wild, irresponsible, unelectable platform of “tax and spend”, but a modernised Keynesianism:

And the difference between the two is?

22 thoughts on “The solution according to Peter Hain”

  1. Tax and spend implies runaway revenue expenditure. Hain is proposing capital expenditure. Mahoosive difference between the two

  2. The problem is that, while Labour is in theory in favour of investment in infrastructure, when it actually comes to building new roads, airports, power stations etc, in practice they tend to be dead against it.

    The Blair/Brown governments’ record on road building was pathetic, and they irresponsibly procrastinated on airport and energy policy.

  3. If more infrastructure is so worthwhile, why the arguments over whether HS2 would pay for itself? How come the original investors in the channel tunnel lost their money? I could go on

  4. @Ralph Musgrave

    That has always been the problem with infrastructure investment – who pays for it and how to do it without loosing money.

    Of course, we have been here before. When the UK first built the railroads, it was pretty much all private investment and most of the private investors lost their money. A few did not and they were able to buy up their competitors railroads and build the first national networks.

    On the other hand, when the Indian railroads were first built, it was done with British private investors money. However, to get the money, the Indian tax payer had to agree to guarantee that the investors would get their money back plus interest. Since India was part of the British empire at the time, the Indian tax payer did not have much of a choice in the matter.

    Which brings us neatly to the proposed new nuclear power stations in Britain. The international investors want Britain to guarantee their return on investment by fixing the price of the electricity.

    What goes around, comes around….

  5. Curmudgeon: Don’t forget the reservoirs that never got built under both ZaNu and BluLab.

    “Capital” spending is still state misallocation of funds. It will be an expensive balls-up whatever they do.

  6. Peter Hain is against job insecurity. Job insecurity is the remaining incentive to work for your pay sincepride in your work has been rubbished by two generations of lefty academics.
    When Peter Hain was in government, his government’s failure to enable/encourage housebuilding (and its unwise policies to (i) encourage millions of youngsters to leave home and study at university to gain qualifications that gave them no economic benefit and (ii) permit unlimited immigration from poorer countries in the eastern part of the EU) created a major housing shortage and a more-than-trebling of house prices in England (more than doubling in Scotland) in just ten years. Do we want more of that?

  7. Curmudgeon,

    “The problem is that, while Labour is in theory in favour of investment in infrastructure, when it actually comes to building new roads, airports, power stations etc, in practice they tend to be dead against it.

    The Blair/Brown governments’ record on road building was pathetic, and they irresponsibly procrastinated on airport and energy policy.”

    And they’re in favour of all sorts of “investment” that’s complete bollocks, like building new shiny hospitals to replace the old but functional one.

    High speed broadband is their current favourite, but that’s mostly bollocks too. Almost no small businesses need high speed broadband. Video production, is about the only thing. And if you really need that, you go and find a business centre in a converted farm with a fibre ethernet and rent an office there.

  8. So Much For Subtlety

    Tim Newman – “High skills, he says? Perhaps those thousands of angry young Muslim males we’re being encouraged to import will possess them?”

    Better angry young Muslim men with no skills than c*nts from the anti-Apartheid struggle whose main claim to fame is praising a terrorist who managed to incinerate a harmless grandmother.

  9. whose main claim to fame is praising a terrorist

    And I thought his claim to fame was to be the most orange person ever elected to Parliament. 2nd most orange to have stood as a candidate. Beaten to the top by Sheridan, of course.

  10. Infrastructure investment is also a head fake. Business isn’t being held back by regulation and taxes. No, it’s caused by inadequate infrastructure. Yeah, so quit complaining about taxes and regulation.

  11. There’s a particularly acute measurement problem with government ‘investment’ in infrastructure. Even the most Byzantine PFI project can eventually have a cost put on it with enough exegesis of the books by the auditors, but how do you calculate the return? A sufficiently large project is going to be sui generis which makes any sort of statistical inference highly suspect. I doubt most of the time you can even get a consensus about the sign of the ROI, let alone its magnitude.

  12. WTF is modernised Keynesianism?

    Hain spilled the beans: the alleged great return from spending on infrastructure has nothing to do with infrastructure, it has to do with the Keynes idiocy of government spending into the economy boosting the economy. Especially if they spend money on unionized construction workers, who vote for Labour.

  13. @ BiCR
    There is almost always a consensus about the sign of ROI because everyone *wants to beieve* in it and the handful of guys who look at the project and say: “Hey, wait a minute …” are derided as idiots or Luddites. If necessary the bureaucrats will flatly lie about the numbers (as in the case of the Channel Tunnell where revenue projections and hence passenger numbers were back-calculated from the earnings per share figure they wanted to forecast in the prospectus).
    Anecdote alert: 50-odd years ago my mother was a member of the minority group on the Borough Council Housing Committee: a lot of people thought that the Council’s Direct Labour force was less efficient than private sector builders (including schoolkids like me who noticed, without even trying, the difference between Wimpey sites and council housebuilding sites as we cycled past them) but the Borough Architect insisted that Direct Labour was good and presented figures to the committe every month showing that their production exceeded cost. One time I looked at the figures and pointed out that although total value exceeded total cost, the increase in value during the month was less than the increase in cost. After my mother opassed on this insight to the committee the BA got his staff to fudge the data in a more sophisticated manner.
    Moral – do not trust a consensus whose views are based on cleverly falsified data.

  14. Surreptitious Evil – “And I thought his claim to fame was to be the most orange person ever elected to Parliament. 2nd most orange to have stood as a candidate. Beaten to the top by Sheridan, of course.”

    They are probably linked. Some people are just ashamed to be born White I guess.

    Sad.

  15. Bloke in North Dorset

    “Who is Peter Hain?”

    A foreigner who came here, disrupted a cricket match and got himself in to a position where he can tell the rest of us how to live our lives. He now complains we are beastly to foreigners.

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