The great debt deceit: how Gordon Brown cooked the nation’s books

Philip Glen

It is about time this scandalous deceipt of excessive public spending was highlighted. North Wiltshire had perfectly good Council Offices replaced at a cost of £19million via the Liberal Democrats using PFI 'cover up'. The whole wretched business is on a par with the systematic rifling of pension funds to the tune of £5 billion a year, EVERY year since 1997. Followed by the wringing of hands how necessary it is for everyone to save for their retirement. What a disgrace.

Ray

Only under a government as incompetent as this one would a PFI contractor be allowed to charge taxpayers £490 to fit a door lock (Blackburn Hospital) that costs a mere £15 to install in a neighbouring non-PFI establishment (Calderdale Royal Hospital).

Source: National Audit Office, 2008

HJ

A good article.

However, when you say that "It is a basic principle that most governments, even socialist ones, pay off debts in times of prosperity. Mr Brown’s innovation was to reject this tradition." you perhaps don't draw attention to the fact that the times of prosperity were only kept going for so long by the racking up of debt. In other words the 'good times' wouldn't have looked so good, nor carried on for so long without the government spending that the debt funded.

This is why the downturn will last much longer than pervious downturns. Just as debt kept the good times rolling for an artificially long time, so debt will keep the bad times going for many years.

Frank Pulley

HJ

I love your typo "pervious" - in the context it was written, it could be taken as a conflation of 'perverted' 'pervasive' and 'perfidious' or even the antonym of 'impervious' (is there such a word as 'pervious' - I've never heard or seen it used?)

Query for the authors of this excellent article - what part did Christopher Bland play in all this? His bipolar political connections have always fascinated me and wasn't he one of the original archtitects of PFI (or PPP as it later became known). Did your research reach those early connections and lter ramifications?

wrinkled weasel

You mention the Edinburgh Royal Infirmary, something I have personal knowledge of.

It is a PFI hospital that is so badly constructed, it will have to be pulled down long before its 30 year contract expires. On the outside, it looks wonderful, but the reality is that most of the staff there work in windowless, overcrowded rooms with no air conditioning and little ventilation. Within two years of opening it was on the "dirty" list, as the second dirtiest in Scotland, with the blame being placed firmly at the feet of Consort Healthcare, the PFI concern that has the cleaning contract. Car parking is so limited that it has to be rationed for the staff, who have to pay for a parking space. Consort Healthcare refused to reveal what they were making from these charges but the estimate is £3 million per annum,

I believe the estimate of liability for health based PFI contract payments is now about £500 million each year. SNP sources suggest that hospitals financed this way cost about twice as much to build and maintain. Thank your Gordon, for telling us how much you are spending on the health service. Now we know where it is going - straight into the pockets of private investors.

NorthernJohn

Why on earth didn't David Davis make something of this before now? I can understand keeping your powder dry before 1997 because it probably would not have made much difference to anything (in fact, given the inevitability of a Labour victory in 97, it might have lent it democratic legitimacy, had it been announced).

I'd thought this profligacy was just incompetence. It sounds like a deliberate plan.

Graeme Stewart

The Consevatives should be hammering away at this and driving it into the publics mind. Then they will have given themselves the room to manoeuvre - eliminate public sector early retirement, non-funded pensions etc. Slash the workforce by eliminating pointles regulations. Sell off the motorways and run them like French system, tell the EU they aint getting their £10 billion per annum gift from Tony. There is a lot that can be done but it will take imagination and courage, something the Tory's haven't shown yet.

Kenneth Perry

Come off it. We have beden in debt since 1694,but I agree PFI diminishes practicable accountability,always difficult post Mr Gladstone .

Corin

If a PFI project proves to be substandard, not fit for purpose, refuse to pay.

Nicholas Bird

Some defence debt has been hidden, not through PFI, but through the simple expedient of delaying contracted payment until 2010 or later, and keeping schtum about it. Sir Max Hastings, in a Chatham House on-record lecture last night, revealed that he had learnt of this dceception from informed and reliable sources.

Alex Dick

It seems to me PFI is in a way politically middle of the road. It introduces public profligacy and incompetence to the private sector.

steved

why is it only now that the so called experts have cottened on to the,"thats the way to do it"gordon brown spending plans.private eye has been telling all who read it from day one.but then it's only a satirical mag,after all.go back through the past issues and the way we are today has been foretold as if by a clairvoiant.
did you see harriet harman on question time.she died the death of a thousand nightmares,with ian on her left having a field day.

Tilak

Credit where credit is due! Baroness Shriti Vadera surely has a partial claim for organising the infamy that the hugely incompetent Brown is presiding over. Huge debts and almost nothing to show for it and the Chabli socialists, Patricia Hewitt among them, hurling themselves with indecent haste at the private sector shamelessly. Disgusting hypocrites robbing the modest hard working of a future and with intolerable self-righteousness.

Herbert Thornton

The most significant difference between Gordon Brown and Robert Mugabe is that Brown has been much cleverer in concealing his bankrupting of the economy.

When, eventually, the economy really starts to collapse, what will any government be able to do about it - other than repudiate the debt or resort to inflation of the currency on a massive scale?

John

After the figure of the national debt, percentages should be added stating the contributions made by each chancellor and their government so we can talke about the Darling Debt, the Brown Debt, the Clarke etc. Odd noone has calculated them.

Nicholas Storey

Never, in the field of national economics, has so much be owed by so many, to so few.

Sam

You forget the big one - state pensions liabilities of well over £4,000,000,000,000 (trillion). That triples your national debt estimate, and it's increasing by over £150 billion per year!

J B

One thing that does reasure me is that of the 130 or so "major" PFI projects ( minor ones?- sounds ominous!) most can be geographically located ie in England or Scotland etc.
Thus, when we get to splitting up the British national debt of which PFI is a part, there should be little to negotiate about- for this sub category of debt

I am assuming.

Ivy Eileen

Why has this not been hammered out on the front pages before ? In last Friday's TV interview, Brown criticised the banks for their off-balance sheet accounting - but he has billions hidden off the national balance sheet with his PFI/PPP projects. No-one picked him up on this. In journalism, only Patience Wheatcroft (former Times City Editor) stood up and pointed out the stupidities some years ago.

Now, with the property market, Brown's "cleverness" is seen to be clumsiness. He gives "independence" to the Bank of England to determine interest rates according to his rules (consumer price index, not RPI, and CPI omits housing). Result ? - artifically low interest rates... and boom time. Now, when lower rates are a well-known tool to answer recession and a housing slump, the B of E cannot lower rates because their index (CPI) doesn't reflect falling house prices. Who is shooting who in the foot ?

Read it all in detail in "Gordon is a Moron", but you can't stomach more than 2 chapters without a break. It's too depressing.

Stephen Green

All the politicians are screaming about the off sheet balance sheet scams in the private sector. Come on Culpability Brown The PFI scam is the biggest of them all.
That, plus your fraudulent fixing of the inflation figures, will be your lasting epitaph

C Powell

The Tories should be hammering this point home at every opportunity, starting with next week's conference. They need to say, loudly and clearly, that the debt Labour has landed each person with is £X, that it is growing by £Y for each day Labour stays in power, that Labour are pursuing a "scorched earth policy", that each unfunded promise (computers for children etc., will cost so much and that hard choices will need to be made when the Tories get into power. Since all this money has been wasted in the public sector that is where the cuts will have to be; sacking 50% of the bureaucrats and jobsworths would be a start.

The Tories need to be much much more hard-edged about this to expose this fraud by Labour.

DJ

Ive always wondered why it was when there were streets of beautiful victorian and edwardian houses lying empty in Liverpool the local labour council thought it the best idea to pull them all down and rebuild new ones instead of the much more cost effective (never mind eco friendly and historically vital) route of renovating these properties. What the council have done here is unforgivable. One by one the houses which were bought under right to buy have been purchased back at a loss for their owners after their house price dropped dramatically. The reason for the drop in price? It happened when the council moved all their tennants out and left the houses to rot for a few years, destroying the local community and leaving these people living next door to empty houses or worse, squatters. When asked (on a recent channel four programme) about why the council decided to choose this path rather than renovate they had no answer and now we see why -its jobs for the boys who charge what they like knowing they'l get it because the council are paying. I always wondered where this seemingly bottomless pit of money was coming from...now we know.

Expat 44

From Expat 44

A good article
Most enlightening
Thank you

Cheerful news for the next UK government.

Remember! It's always easier to take over a job from someone who's cocked it up, than to take over from someone who's been a great success . .

john Walter

A scandal? A deceit? Come on, who are we kidding.The Tories are never going to do anything against the PFI or the National Debt other that raise it further. Britain has a long way to go before public debt becomes a problem. We survived it under Walpole and we shall do so again. If the Germans can live with a 60% debt/GDP ratio as well as a tax/GDP ratio of 50% then so can we. And as for Italy, well they haven't gone under have they!
So articles like this having nothing to bleat about, except stir up trouble. More tea, Dave?

David

@John Walter

Perhaps you should look up what "GDP" actually measures. It isn't what you think it is!

Gordon M

john Walter
September 30th, 2008 10:12am
When you posted your comment the real UK ratio of Debt to GDP was nearer 80% but I'm afraid that since the Credit Crunch and the bank bail outs this has doubled again.

Last time out we had North Sea Oil and a reasonable home-based manufacturing sector to help balance the books. Both are now a pale immitation of what they were.

The trouble with putting all of your country's eggs into the one basket(financial services) and flogging the family silver is that you have absolutely got to take good care of that basket.
Mr Brown has clearly neglected that last part.