WE NEED to end the granting of bailouts, subsidies and state-backed loans to corporations and restore meritocracy to the world of business.
Weak British businesses need to become antifragile, and if they cannot they should be allowed to fail so that new players can enter the market.
When a firm operates beyond its ability and puts itself into a financial situation where the numbers do not add up, that business should adapt to survive. Yet right now many unsustainable and zombie companies are trading in the knowledge government will come along with taxpayers’ money to save them.
This explains why you never hear the Tory party talk about capitalism and competition any more – the Conservatives have moved away from both. The party is now a champion of corporatism and big-state regulations that favour corporations over small businesses, in the process discarding most free market principles.
Business people who rely on taxpayer capital or subsidies to keep their operations afloat need to start being pushed out of the market. It is not down to the taxpayer to finance their revenues or losses – they take the profits, so they must also take the losses. We are not communists.
A perfect example: Bulb and all the other energy company bailouts. We should have let them fail.
Why are we bailing out companies partly owned by Russian billionaire Yuri Milner? We are not in Russia. We are also meant to be in a free market economy. The government pumped £1.7bn into a company and said it was to protect consumers – using their taxes. It is like the government saying to me, “Look Mike, we have to give some of your taxes to this failed company so they can still provide you a service”.
Hell no. Government does not need to use my taxes to protect me. I’m an adult not a child, and I will just go to another energy company and use them. It is that simple.
The bottom line is they are not protecting consumers, but using consumers’ taxes to bailout a private company that has failed in navigating the free market.
Before 2021 Bulb had a black hole of £200m. The company was a failure anyway. Companies with a black hole of £200m are unsustainable unless they suck from the municipality or get taxpayers to pay off their debt, and that is what Bulb has done. Billionaire Yuri Milner and the other owners must be laughing at us British taxpayers.
Another example is VIP contracts awarded without any competition. No wonder we are paying an arm and a leg for goods and services we could get much cheaper if the contracts were subject to free market bidding.
We cannot keep going on like this. We cannot abolish competition because that is the key to quality and value, which is what us taxpayers need from the private sector.
Within an economy, corrections and readjustments are good. Business and innovation thrives when weak businesses and obsolete inventions get replaced with strong businesses and new inventions. This is why mankind has progressed so quickly. Meritocracy works, but nepotism sends us south on the path to nowhere. Kicking the can down the road only staves off the inevitable and causes troubles along the way.
I would not dare dream of asking the taxpayers to cut me a cheque to subside my business losses or risky practices, and most British entrepreneurs feel the same. But there is a minority of businesses, mainly corporations, who are solely surviving due to taxpayer backing and state bailouts – an unsustainable violation of free markets.
Corporations should not be shielded from reality at our expense. It is high time we let market forces and financials dictate their future, not the state and the taxpayer.
