Realist, not conformist analysis of the latest financial, business and political news

You’re Right, Labour Does Want To Steal Your Money

He wants to spend hundreds of billions of your money

An argument is being made that nationalisation of everything would be a good idea. Hmm, the idea of Owen Jones running the utilities does not exactly excite, it has to be said. But let’s assume that it’s not going to be a disaster. OK. So what price should Labour be paying for these assets?

A sound economic approach would be to return to shareholders the money they had actually invested in the companies – the “book value” of their equity, a total of £56bn – without providing any public money to preserve any of the current excessive returns.

And there we have it, the plan is to steal your money. Because the only correct value of anything is what someone is prepared to pay for it – the market value.

Let us run this the other way around. Chelsea Barracks was sold off as a development site for £959 million. The acquisition cost was whatever it was in the 1860s when the site was first developed as a barracks. So, what’s the correct price for selling that land? The market price or the book value of the equity, that 1860s purchase price?


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4 years ago

One reason current value can exceed the price you paid for the asset is that those using your money have been paying you for the privilege. If government can ignore this in computing a “fair” price at which to force you to sell, there is no reason it cannot ignore the price you paid in the first place. After all, justice for you is negligible when we are pursuing the Greater Good.

Andrew Carey
Andrew Carey
4 years ago

Nice for holders of Royal Mail shares which currently trade at about 2/3rds the price Vince Cable sold them to me for. I get a nice little uplift to what they were at privatisation.
A selfish reason to vote Labour – a Party that does rather appeal to these instincts in people.

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