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Opinion: Forman & Son MD Lance Forman thinks government is unable to run big business

PUBLISHED: 08:00 17 May 2017

CARMEN VALINO ALL RIGHTS - on shift

Business plays by a different rulebook to government.

In the last week on LBC radio, two front bench Labour spokespeople, namely Diane Abbott, the shadow home secretary and Angela Rayner, the shadow education secretary demonstrated their total lack of knowledge and competence when asked straightforward questions about their own departments.

And these people want to run our country. Heaven forbid. Now we read in Labour’s leaked manifesto that Labour wants to nationalise the energy industry and railways. Why it thinks it can manage these businesses better than the private sector is beyond me.

Yes, business, in essence, is straightforward, but it plays by a different rulebook to government. The only way a business can be sustainable is if it earns more revenue than it spends. If it makes a loss one year it can take out an overdraft, but it cannot do this indefinitely or it goes bust. Government has proven hopeless in managing its revenues and outgoings and keeps running deficits. It can only do this because it has a get-out-of-jail-card, which is printing more money. Businesses don’t have this luxury. But this approach only works short term, otherwise it results in rampant and uncontrollable inflation. Hence the problem with a socialist Labour Party threatening to take us back to the 1970s and renationalise our industry. As Margaret Thatcher commented at the time: “The trouble with Socialism is that eventually you run out of other people’s money”.

It’s all very well Jeremy Corbyn talking about fairness, taxing the rich, redistribution of wealth and so on, but ultimately the only way you can pay for things is to have an economy which is growing, and that means having businesses which are profitable. And that means businesses which are not run by politicians. More from Lance


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