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    #76
    If there is enough profit to apply a windfall tax, doesn't that show that PFI is a bad deal for the taxpayer?

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      #77
      Originally posted by E10 Rifle View Post
      But how much would such a windfall tax bring in, if part of the problem is that PFI firms' profits have been squeezed in the age of austerity? Also, it strikes me as an inefficient circulation of money – government splurges money to PFI firm, gets some of it back at a later date once tax returns have been filed.

      Feels like a 1997 answer to a 2017 problem, an apt description of the MP who proposed it.
      I don't think anybody much is pushing for more PFIs. It's very 1997, as a way of getting some cash back from poor deals in the past. It could be worse be worse- the 1997 tax brought in £5bn and was pretty forthright in requiring payment by December 1998. I think it's a constructive suggestion by her.

      I'd rather see them buy the worst ones out altogether though GY isn't sure that can be done for all that many.

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        #78
        It can be done, it's just not going to save all that much money. At least for the bond based ones, which tend to be the big ones. It could still be worth doing for operational or ideological reasons.

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          #79
          Originally posted by Snake Plissken View Post
          If there is enough profit to apply a windfall tax, doesn't that show that PFI is a bad deal for the taxpayer?
          Nobody says they were a good deal now. They're sometimes not as expensive as they sound because they also include long term service and maintenance agreements. There was some logic in locking in this stuff because it always used to get cut by governments, hence the appalling state of public buildings in the 90s. But it cost too much. And if we're still committed to paying for it even if we decide that we don't want that hospital any more.

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            #80
            Originally posted by Ginger Yellow View Post
            It can be done, it's just not going to save all that much money. At least for the bond based ones, which tend to be the big ones. It could still be worth doing for operational or ideological reasons.
            So would a windfall tax be better? Or even possible?

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              #81
              Depends who you taxed.

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                #82
                Don’t the bonds all have a tax call?

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                  #83
                  I don't think anybody much is pushing for more PFIs
                  I wasn't talking about PFIs as the "1997 idea" but windfall taxes

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                    #84
                    Interestingly, Infrastructure UK (part of Osborne's Treasury) in 2012 said that some PFIs had made "windfall" profits. Nice choice of words.

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                      #85
                      Originally posted by ursus arctos View Post
                      Don’t the bonds all have a tax call?
                      Looking at the prospectuses of a couple of deals, no, oddly enough, though one references a "tax event" (undefined) in the description of the RPI swap.

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                        #86
                        Originally posted by E10 Rifle View Post
                        I wasn't talking about PFIs as the "1997 idea" but windfall taxes
                        I know. I don't know if there's a better one though, from what GY says.

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                          #87
                          Funny that Spain seems to have done loads of PFI. Do they have the same problems?

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                            #88
                            That is indeed very odd, GY.

                            I'm not familiar with the PFI details, but Spanish infrastructure in general is an unmitigated disaster.

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                              #89
                              It occurs to me that if you did enough government bond issuance to fund all these buyouts, it might push Gilt yields out to the point where a Spens call wouldn't be all that expensive.

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                                #90
                                Originally posted by ursus arctos View Post
                                That is indeed very odd, GY.

                                I'm not familiar with the PFI details, but Spanish infrastructure in general is an unmitigated disaster.
                                Clientilist? I once went on the High Speed train to Aragon. It was very nice, but I wasn't convinced of the business case.

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                                  #91
                                  Consider the cases of the ghost airports (and links therein)

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                                    #92
                                    Originally posted by ursus arctos View Post
                                    When I look at that, I'm kind of understanding why the hard men of the Euro didn't say "Go ahead, do some Keynsian investment, spend yourself out of this downturn".

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                                      #93
                                      Originally posted by Ginger Yellow View Post
                                      It occurs to me that if you did enough government bond issuance to fund all these buyouts, it might push Gilt yields out to the point where a Spens call wouldn't be all that expensive.
                                      I got what a Spens call is. But pushing gilts out means making government borrowing more expensive, right?

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                                        #94
                                        Yes. Or rather, it is government borrowing being more expensive.

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                                          #95
                                          So that's us saving money on buying these out but spending more on borrowing more generally? I don't get why you'd do that.

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                                            #96
                                            I'm not saying you would. Just that if you were planning on doing the buyouts anyway, the Spens issue might not be quite as big as it first appears based on current Gilt yields. But in practice it's not a realistic prospect. I doubt the government would do something that would push out yields by the 5% or whatever it would take to neutralise the Spens premium.

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                                              #97
                                              Ah, thanks.

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                                                #98
                                                Apologies if this has already been referred to but I didn't see this NAO report get a huge amount of coverage.

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                                                  #99
                                                  One other point about Carillion, which is by no means a tangential or 'one bad apple' one, is that they were enthusiastic blacklisters of trade unionists. Which is another part of outsourcing's appeal to some decision-makers.

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                                                    Absolutely.

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