TPA: McDonnell in fantasy land on deficit and PFI plans

Responding to John McDonnell's announcement that Labour will end PFI contracts at Labour Party Conference, John O'Connell, Chief Executive of the TaxPayers' Alliance said: 

"While past governments have signed up to some truly dreadful PFI deals, most projects are built to price and specification within the agreed timeframe to the satisfaction of the public servants that commission them. The whole point of PFI is to transfer risk to the private sector and protect taxpayers from losses that inevitably arise from politicians’ mismanagement of major projects. Taking over PFI contracts won't remove the underlying risk or result in any more schools or hospitals being built but it will mean that taxpayers are lumbered with those risks."

On nationalising private industry, he said:

"Labour’s proposal to seize control of rail, water, utility and construction companies without paying the market rate for the shares is daylight robbery. Far from being “for the many” McDonnell would be helping himself to the pension savings of the 17.5 million private sector workers who have had the temerity to save into a pension for their retirement. It’s difficult to see why anyone would invest in the UK if the government was going to misappropriate private property like a South American dictator. This seems to be of little concern to the opposition front bench who will have the luxury of retiring on taxpayer-guaranteed pensions."

On capping credit card interest, he said: 

"There's little point in capping interest payments on personal credit cards only to pile up debt on the national one and get people to pay off the interest through higher taxes. It's a pity that the Shadow Chancellor's concern about indebtedness does not extend to tomorrow's taxpayers, especially at a time when debt interest on government borrowing is running at more than £700 a year per person.

This measure will simply lock out poorer people from legitimate finance and push them into the arms of loan sharks, as providers will no longer be allowed to charge for the added risk. It will also penalise existing credit card holders as providers will be forced to pass on the cost of compliance to customers."

On the nation's debt and deficit, he said: 

"Just about every politician in the country has proposed “closing tax loopholes” as a silver bullet for eliminating the deficit at some point, but the idea that the government is just wilfully foregoing tens of billions of pounds in easily-collectable tax revenue is laughable. It's not credible to talk about closing tax loopholes without a plan for substantial tax simplification that would enable it. Neither is it credible to say you’re going eliminate the deficit without reducing spending or increasing taxes across the board, no matter how many spurious rules are dreamt up."