Inquiring minds are wondering if they are gazing into the future of US states and municipalities after reading the Daily Mail article “How Labour Left the Taxpayer…“. The article describes a country attempting to continue its spendthrift ways…in other words, what the US will look like if we don’t cut spending drastically:
The true cost of Labour’s expensive Private Finance Initiative scheme was laid bare yesterday as the bill taxpayers face soared fivefold.
Official figures show that 544 PFI projects such as new school and hospital buildings have been launched since 1997.
The original capital cost of the projects agreed under the Labour government was £51.5billion.
But repayments for these will have rocketed to an eye-watering total of £245billion by 2047/8, according to the Treasury.
That is the equivalent of £14,800 for each of Britain’s 16.5million working households. PFI schemes allow governments to put off raising upfront money for new buildings.
Instead, a private company is given a lengthy contract to build a school or hospital and then provides related ‘services’ to the public sector.
The Government leases the building for the length of the contract before it reverts to public ownership.
But any small change to the build or service is usually charged at exorbitant rates, allowing the company to make a healthy profit.
The scheme was introduced by the last Conservative government under John Major in the early 1990s. Labour then adopted it with relish when Gordon Brown used it as a convenient way to stay within his strict borrowing rules for most of his time as Chancellor.
Tory MP Jesse Norman has launched a campaign to get a PFI rebate for taxpayers.
He is calling on banks, construction firms and service companies which have benefited from the initiative over the past decade to give back a small portion of their profits.
‘Under Gordon Brown, Labour went on a spending splurge with borrowed money which taxpayers will eventually have to pay back many times over,’ said Mr Norman. ‘As a senior Treasury adviser working for Gordon Brown, Ed Miliband bears responsibility for a borrowing trick that will mean future generations saddled with billions in debt.
Unfortunately, it looks as if Britain’s left still thinks it is in a high school debate. They haven’t yet learned that, even if you ‘win’ the debate, reality will ultimately triumph.
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