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Home / Tim Worstall /Well, if the government’s going to hand out money like a drunken sailor…

Well, if the government’s going to hand out money like a drunken sailor…

Summary:
It would appear that Norton Motorcycles wasn’t all that good a thing to be spending money upon:The chair of parliament’s public accounts committee is calling for an investigation into the government’s funding of Norton Motorcycles and has accused officials of “blindly pouring” millions of pounds of taxpayers’ money into the motorbike firm before it went bust.The background is said to be somewhat seamy:However, the story is far more complex than that. It is a pile-up that includes hundreds of hapless pension holders, together with unsuspecting Norton customers, staff and even government ministers, who repeatedly endorsed Norton as millions of pounds in taxpayer support flowed into the firm. All will take a lot of persuading that this is merely a story of a plucky British company that is a

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It would appear that Norton Motorcycles wasn’t all that good a thing to be spending money upon:

The chair of parliament’s public accounts committee is calling for an investigation into the government’s funding of Norton Motorcycles and has accused officials of “blindly pouring” millions of pounds of taxpayers’ money into the motorbike firm before it went bust.

The background is said to be somewhat seamy:

However, the story is far more complex than that. It is a pile-up that includes hundreds of hapless pension holders, together with unsuspecting Norton customers, staff and even government ministers, who repeatedly endorsed Norton as millions of pounds in taxpayer support flowed into the firm.

All will take a lot of persuading that this is merely a story of a plucky British company that is a victim of circumstance. Their anger looks likely to be directed principally towards one man: Norton’s boss, Stuart Garner.

The excuse from those handing out your and my money is:

A BEIS spokesperson said: “All Government funding awarded to the company was based on the usual processes of assessment and due diligence. At the time these awards were made, our due diligence did not indicate that the business was failing.”

Perhaps a little more diligence might be suggested.

This is not to berate, particularly, the more recent members of government. Much the same has happened whichever flavour has been sitting around the cabinet table. The reason being a point that Adam Smith made.

The people willing to pay high interest rates are precisely the people a prudent banker doesn’t want to led to. They’re promoters, builders of castle in the sky - a practice that does rather tend to come crashing down. Now that government is a likely funder of enterprises the very people we don’t want to fund are those asking for that government money.

Partly because of Smith’s very point, partly because of course you’d only go to government if normal market processes won’t fund on the basis of that lack of decent foundations.

That is, the argument against government funding is exactly that used to justify it. They can’t get money elsewhere - quite, so why the heck let them have any?

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Tim Worstall
Tim Worstall is a British-born writer and Senior Fellow of the Adam Smith Institute. Worstall is a regular contributor to Forbes and the Register. He has also written for the Guardian, the New York Times, PandoDaily, the Daily Telegraph blogs, the Times, and The Wall Street Journal. In 2010 his blog was listed as one of the top 100 UK political blogs by Total Politics.

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