Today the Shadow Chancellor John McDonnell launched a report commissioned by the Labour Party from GFC Economics & Clearpoint Corporation Management Ltd. I have had a quick read of it, not in any detail but enough to think that you might be interested in reading it too. Here it is:
Financing Investment: Interim Report
It is called Financing Investment but it does not say much about financing investment. I suppose a report called Let’s Put The National Investment Bank And The Strategic Investment Board And A Bit Of the Bank Of England All Next Door To Each Other In Birmingham And Mention It Twenty Times is better for votes in Birmingham. They’ll be able to put out a special Birmingham edition of Monopoly with that street collecting a massive rent.
However there is more to this report than just more swanky government buildings in Birmingham. Branch offices in Glasgow and Cardiff are also promised. And this caught my eye:
There is a risk that the disproportionate number of technology companies in London and the South East will increase, exacerbating regional inequality.
You hear that, South East? Only in Labourland is an increase in the number of technology companies in one area seen as a “risk” in itself.
But that is a mere taster. On page 47 we begin to reach the meat of the proposal. Rejoice! There is to be something called a Strategic Investment Board.
The Strategic Investment Board will sit at the heart of the economy, coordinating R&D, commercialisation and information flows
We learn that
3. The Strategic Investment Board will draw on science and technology to devise comprehensive policy proposals for investment. There will be an emphasis on R&D investment. Private sector R&D will not be crowded out. It will be encouraged.
It is nice to be reassured that private sector R&D will not be crowded out, but the very fact that the possibility is mentioned does rather imply that public sector R&D will be crowded in. Who will be deciding who gets this “investment”, and what reason have we to suppose they would be good at it? The answer is not reassuring:
5. Scientists and researchers at the cutting edge of their fields will be appointed to senior advisory positions. The Strategic Investment Board will also seek the advice of trade unionists, businesses and leading industrialists.
Ah, “getting round the table”, I remember that. I was too young to understand all the hoo-hah about Barbara Castle’s In Place of Strife in 1969, but I can just about remember the series of increasingly ineffectual “Solemn and Binding agreements” and “Concordats” agreed between Labour governments and the unions over beer and sandwiches at No.10 as the 1970s wore on. None of them stuck.
(Edit: in the comments Sam Duncan says, “So they’re basically digging Neddie and the NEB out of the dustbin and bunging them in the microwave for a couple of minutes, then? That’s the Great Corbyn Plan?”)
On page 48 it says,
The Strategic Investment Board will scrutinise and advise the monetary and financial policy authorities as banks shift from unproductive lending to innovative companies.
That all sounds very nice, but why is a bunch of scientists, businessmen and trade unionists moonlighting from their proper jobs expected to be able to tell what lending is unproductive? While lending to “innovative companies” can turn out well, it is not a game for amateurs. God only knows that the banks have not always done a good job, but at least it was their job. And it is strange to see the socialists display such faith that the capitalist exploiter will act for the common good and not, for instance, draw an enormous salary augmented by backhanders to ensure that companies in which he has a well-disguised interest get all this luverly investment.
On page 49:
We suggest that the Strategic Investment Board has six permanent committee members plus two
representatives, one each from the National Investment Bank and the publicly-controlled RBS. This
will ensure a consistency between the polices of the National Investment Bank/RBS and the Bank of
England.
Wha-wha-what is the Royal Bank of Scotland doing there? They’re not thinking of using money deposited by the public with RBS for this “investment”, are they? Investment specifically directed at innovative companies? That might, er, cause queues to form outside RBS branches on the morning of a Labour election victory.
I have left the biggest question, where the money is to come from – because I really don’t think RBS can cover it all – as an exercise for the reader. The Labour party answer is “From the National Investment Bank, stupid.”
So they’re basically digging Neddie and the NEB out of the dustbin and bunging them in the microwave for a couple of minutes, then? That’s the Great Corbyn Plan?
Forward to the 1970s, comrades! Picking Winners! National Champions! Grundy NewBrains for all!
> Scientists and researchers at the cutting edge of their fields will be appointed to senior advisory positions.
Because that’s obviously a better use of their time than science and research.
The expected flow of private and public monies into climate change research and amelioration never materialized, so they’re going to change the system such that they don’t have to rely upon the vagaries of private decision-making.
Now, the right people will be able to make such decisions.
Gender studies will become fully-funded. No longer will you have the waste of thirty different deodorant products.
Run away.
I would say “Top. Men.” But that’s probably rape, these days, so I’d better not.
@Natalie
Thank you so much for doing this work for us.
Now wash your hands!
Re RBS-isn’t it obvious? “We” own it! So “we” can do what we like with it. And clearly “we” would like to do this.
@Alsadius
Scientists and researchers at the cutting edge of their fields will be appointed to senior advisory positions.
Never mind the waste of their time!
I’m a “senior academic” and I’ve sat on many grant awarding panels (and even applied for some grants) and I can tell you that the scientists in senior advisory positions will be beavering their socks off to make sure their science is heavily funded-whether or not there’s any prospect of any payback. It’s the economically rational response for them.
Also, what bobby b says.
Leaving aside their planned thievery the real question to me seems: How many times?
How many times do people have to have the same shite shoved up their nose before the stench registers?
If govt pricks could pick winners etc we would have been buying super-cheap, super-wonderful soviet goods for the last 100 years. That says it all.
With a little decent leadership the Tories should be able to wipe their backsides with ZaNu. Yet what we have is a vile stupid, arrogant bitch whose latest vote-loser aside from treason against Brexit is to declare you won’t be getting a choice about your–or your loved ones–organs being taken by the state after your death.
The government will invest all our money so much more wisely and fairly than selfish private citizens. You’d have to be a millennial not to laugh – or a man who left grammar school with two Es and learnt the rest of what little he knows from working as a trade union official and then (because of it) as an MP – the sort who learns nothing and forgets nothing. Spending your evenings down at the local labour party branch photocopying leaflets is experience, but of a limiting kind.
Behind the 70s, justly sensed by earlier commenters, Tony Benn’s “White Heat of Technology” rears its ugly head again. This, time, of course, this rehash of the past really will get its innovation right. After all, compared with getting socialism right this time round, getting innovation right would be trivial – right?
(Looming behind that, I sense the corporate state: Mussolini was keen on boards managing industries. According to the theory, the owners got 25% of the places, the public 25%, the trade unions 25% and the state 25% – but owners did not stay owners if they opposed the state, and the state had a huge say in whom the public’s representatives were and what trade unionists were acceptable. Not that it could ever have worked even if it had been honest. Not that that matters, since Labour’s policy has little more likelihood of ever being honestly implemented.)
THAT SAID, a decent house up north will buy you a broom cupboard in London. It seems proper to this blog to ask whether this is the market or, like house prices in California, the 2008 crash, and much else, the state distorting the market. When the capital seems so much more wealthy than the districts, may we reasonably wonder about the state’s role. I have a cunning plan. Let’s not relocate the state; let’s reduce it!
he Strategic Investment Board will draw on science and technology to devise comprehensive policy proposals for investment.
Rather like the “Four Pests Campaign” perhaps ?
Why can’t socialists realize that, whilst government inspired strategies are great when they work, it is when they go wrong they go very badly wrong and continue to go badly wrong ? Because there is no counterbalance, no automatic brake, no means of preventing a problem from escalating, not like the free market will offer – you can say what you like about bubbles, but at least they burst in the end.
If the SIB makes a bad decision and pours millions down the drain on a worthless project, what measures are there to ensure they don’t do it again ?
If the SIB makes a bad decision and pours millions down the drain on a worthless project, what measures are there to ensure they don’t do it again ?
A recent example is the Renewable Heat Initiative in Northern Ireland. Pushed by the powers that be, scrutinised by independent consultants who were clearly clueless, cos they didn’t spot the massive flaw. It going to cost millions and brought down the NI Executive. Imagine something similar UK wide.
https://en.m.wikipedia.org/wiki/Tanganyika_groundnut_scheme
All you need to know about govt investment. Taught to me by my grandfather, I never forgot it.
After World War II it was Labour “Regional Policy” (supported by Me-To “Conservatives”) that pushed business enterprises AWAY from Birmingham (contrary the lies of the BBC series “The Peaky Blinders” – the first series of which turned the veteran Ulsterman who was Chief Constable of Birmingham from the Victorian period to the 1930s into some sort of savage animal – Birmingham was actually a prosperous conservative city before World War II) – now they are trying to push things towards Birmingham.
John McDonnell is a Marxist – he hates freedom and is open in his hatred. But the problem is that that the Conservative Party government can not make a principled case against him and his kind – sadly the First Lord of the Treasury (and-so-on) knows nothing about making a principled case.
Apparently the former executives of Solyndra have already praised the creation of the Strategic Investment Board and offered their full support.
This sounds like the kind of scheme a teenager with no experience of the world would come up with as the answer to an essay question.
This. We can talk about how government funding of R&D seldom results in success, but that’s a misinterpretation of the word “success.” “Success” lies in getting all of that R&D money – public and private – into the right pockets, not in generating products.
Why haven’t they included scientists who also have a track record in approving venture capital investments in innovative companies and who help manage them via board positions? Such people actually have hands on experience plus detailed expertise with in a specific scientific or technology sector. They aren’t really trying or haven’t thought it through have they? Politicians with their degrees and backgrounds a very much unsuited to scientific research projects in the main.
If Labour get in the word strategic will be added to every job title and organisation name which doesn’t already include it and loads of people will be hired to fill the old, non-strategic roles.
I believe it was Harold Wilson who coined the term “white heat of technology”. Tony Benn was the Minister of Technology.
Patrick Crozier (December 13, 2017 at 11:41 pm), you are correct: Tony Benn was Harold Wilson’s “White heat of technology”. Harold described all the wonderful things the Labour government would achieve by relying on the “white heat of technology” and then, to achieve them, chose – Tony “hello, I’m the white heat of technology” Benn. 🙂
IIRC, Tony began his career by trying to use the white heat of technology to shut down Radio Caroline. (The poor film ‘The Boat that Rocked’ tries hard to imply that it was surely a Tory minister who did something so stuffy – not Tory but Tony, you spinning fools. 🙂 )
I only learned all this in retrospect, as I learned about the groundnuts in retrospect, but it has always seemed a metaphor for all those glorious leftwing schemes to be achieved by inglorious leftwing intellectuals.
Niall – my father (Harry Marks) tired to salvage the remains of the railways and so on of the failed groundnuts scheme, he had clients in Brazil for the equipment.
But the British would not issue an export license without an import license from Brazil – and Brazil would not issue an import license without an export licence from the British.
Such is the nature of bureaucracy – the nature of government.