John McDonnell’s Labour conference speech followed a familiar pattern today. He pledged “we’ll bring existing PFI contracts back in-house”, an eye-catching announcement certain to garner headlines.
PR hit assured, his Party began to retreat from the pledge within 15 minutes of the Shadow Chancellor uttering the words.
How much will it cost? Nobody knows. How many contracts would be bought out? Nobody knows. What are the practicalities of such a huge commitment if you don’t know the basic numbers involved? Well, hang on a moment, what we’re talking about is a “review” of doing so…but yes of course we’ll buy them all back…well maybe not all, perhaps just “the bulk”…anyway, who said we’d bring them back in-house in the first place…
It’s predictable stuff, which Labour is too often allowed to get away with. Punt out the headlines about shiny promises, avoid the tricky questions about cost, then fudge the details to a degree that means the Opposition can simply refuse to be held to account on its own pledges. They have done it on PFI, on tuition fees, on nationalising rail, energy and the Royal Mail, and they evidently feel that the tactic works for them.
That’s worrying in itself – such promises raise concerns about potential multi-multi-billion burdens for the taxpayer, and inevitably spook people who might invest in Britain about what might happen to their investments. But it’s also an act of dishonesty which seeks to mislead voters.
Nor is such a practice confined to individual, big-ticket pledges. Its most pernicious use is in Labour’s endless use of the word “costed” to describe their spending plans as a whole. That’s used as a catch-all defence to suggest fiscal responsibility – sometimes even being stretched further to imply cost-neutrality. But what does it really mean?
In the case of their proposed nationalisations, it means nothing at all. They aren’t willing to specify a price, or even to accept that the state would have to pay market value when buying such assets – McDonnell only asserts that “the value of any industry that is brought into public ownership is determined by parliament”. In the case of PFI, they can’t even say how many contracts will be bought out, never mind how much it will cost. In the case of rail, they talk about waiting for franchises to expire, while avoiding the question of how they would buy the rolling stock that actually runs on the railways.
Even on the measures where the Opposition does give a figure, “costed” is often a euphemism at best. They routinely under-estimate the cost of implementing policies, wrongly assuming the state is hyper-efficient, while habitually over-estimating the new revenue that will be raised by tax rises, wrongly assuming that raising tax rates does not stunt growth or change behaviour.
The fact is that the full costs of McDonnell’s policies won’t be known until we’re all paying for them – and by then it will be too late.