Sunday, 20 February 2011

Stop worrying about single mums, it is time to tackle corporate welfare

Welfare dependency isn't just confined to the inhabitants of our inner-city sink estates. Corporations also do nicely out of government largess. Unfortunately, corporate welfare was more difficult to detect than the stroller-pushing single mum in the high Street.

Nevertheless, things changed radically last year. Shortly after the election, the new coalition instructed ministries to publish data on expenditure over £500. We now hae extraordinary database that reveals in startling clarity that many firms now depend on handouts from the government.

Take, for example, the Ministry of Energy and Climate Change. Between September and November last year, the Ministry handed out almost £60 million in grants to private sector firms.

The language used in government accounting lacks a certain clarity. Nevertheless, the meaning of the word "grant" is clear enough. It is not a loan to be repaid later. It is a handout.

The Ministry of energy's database also provides a tantalising hint about how this money is used. The bulk of these handouts go on "asset creation". Perhaps I'm wildly wrong, but I doubt that these "created assets" will eventually belong to the public sector.

Judging by the names of the firms and a casual search on the Internet, many are working in the newly-minted climate change industry. Suddenly, one sees the environmental issue in an entirely different light. There is money to be made and government grants to receive if the climate change fear factor is ratcheted up. I always knew that the environmental lobby was vocal, but I didn't realise how expensive it had become.

Of course, there will be those who will justify this expenditure in terms of the global threat posed by CO2 emissions. I have no strong view on climate change; I am ready to be persuaded. However, I know two things. First, CO2 emissions are up 20 percent in the last decade. Second, two thirds of an increase is due to China. Those generous grants from Ministry of Energy will have absolutely no impact on either of these two trends.

But never let a few awkward facts get in the way of a government handout.


dearieme said...

"Stop worrying about single mums, it is time to tackle corporate welfare": why on earth do you think these are mutually exclusive?

Anonymous said...

welfare payments on single mums are a distraction; the link between business and government, that is where the real action takes place.

Anonymous said...

Have a look at the supporters of the Climate Change ministers in their registered interests.

A quick peek shows they are supported by Venture Capital firms and US Banks whose targets are 33% annual return on capital (assets). You can't get that 33% figure in new technologies without subsidy.

Now the question is cui bono? Do we as a nation benefit ultimately from technologies developed by these handouts? Or should we shun anything that looks tawdry, incestuous and smacks of back-handers for a future payback?

Its a real world out there.

Mark Wadsworth said...

Don't worry about £58.3 million spend on this nonsense, worry about £281 billion the governments spends on 'private sector procurement', i.e. a fifth of GDP or 1.6 times as much as it spends on public sector wages and pensions and, as you say, probably twenty times as much as it spends on single mums.