A warning sign to the nation.

Carillion’s collapse is not only a disaster for its 43,000 employees but a blow to the whole national economy, with up to 30,000 businesses affected in Carillion’s wider network. Of course, all our politicians have gone into ‘blame game’ mode.

The only MPs who can claim to be guiltless of the policy that led to this Private Finance Initiative (PFI) are those on the far left who opposed this dangerous venture into the state trying to get its public services on the cheap.

The short answer is – it is not possible! There is no such thing as free money.

PFI was an idea generated in John Major’s Government but implemented when Gordon Brown was in charge of the Treasury in Tony Blair’s New Labour Government. So, both our main political parties have egg on their faces for the monstrous folly that has put millions of pounds into the pockets of venture capitalists at the expense of the British taxpayer.

Reckless Debt

At a time when interest rates were high and the Government wished to keep borrowing to a minimum it must have seemed attractive to let private investors put up the capital for big construction projects and to delay purchase of the assets over a period of many years. But buying anything on the ‘never-never’ only delays the pain. We are now told that projects valued at £60 billion are costing the British taxpayer £199 billion.

Both our main political parties have egg on their faces for this monstrous folly

It seems almost beyond belief that our politicians could be so incredibly naive to put our hospitals and schools in the hands of these greedy rogues, who have lined their own pockets at public expense. In simple terms, the Government handed out contracts for the building of hospitals and schools paid for largely by foreign investors, who have leased them back to the Government at exorbitant rates of interest in conditions that make vast profits for the investors.

Even after Carillion had issued ‘profits warnings’ indicating that it was in financial difficulties, Transport Secretary Chris Grayling awarded them a contract on part of the High-Speed Rail (HS2) construction.

Carillion have been in trouble for a long time but instead of following a policy of clearing their debts on each project before moving onto the next, they recklessly increased their debts in a kind of commercial Ponzi scheme, by taking on more contracts to help pay off the interest on earlier commitments. Eventually the point was reached where their debt mountain became so massive, and the profits had all been squirrelled away by greedy management, that it became impossible to pay off the debts and the banks would not lend any more.

Day of Reckoning

This has all the feel of the darker side of capitalism and was probably the kind of operation that Marx had in mind when he said that capitalism contains within itself the seeds of its own destruction. I’m not making a case for Marxism, but simply pointing out that there were some things that he got right.

The fundamental weakness of Marxism lies in its dogma of ‘economic determinism’ which sees all human beings as products of their environment. All thought thereby becomes conditioned by matter, because it is a product of matter in motion, which philosophically sets aside the whole notion of human accountability.

It is beyond belief that our politicians put our hospitals and schools in the hands of these greedy rogues, who have lined their own pockets at public expense.

It was this conviction of human accountability to God that was the driving force behind the ministry exercised by the prophets of Israel recorded in the Bible. Listen to this from the Prophet Amos:

You hate the one who reproves in court and despise him who tells the truth. You trample on the poor…You oppress the righteous and take bribes and you deprive the poor of justice in the courts. (Amos 5:10-12)

Amos then goes on to tell the leaders of the nation who are eagerly awaiting the Day of the Lord that it will be a day of darkness not light, because God is a God of truth and justice who holds human beings accountable for their actions.

It is this accountability to a higher authority that is missing in our secular humanist society today. The very existence of these concepts of truth and justice depend upon our recognition of the God of Creation who built these values into the fabric of the universe. When we take God out of the equation we actually destroy the whole structure of society because there are no ultimate values or accountability. Without God we human beings are on our own to make up our own rules that suit our particular needs at the time.

The Underlying Problem

But we live in a moral universe that we ignore at our peril, as the Carillion debacle vividly portrays. The big question now is whether or not our political masters will have the courage not only to take responsibility for clearing up the mess of the disastrous policy of former Governments, but to recognise the reason why the nation is having to bear the huge cost of this folly.

We live in a moral universe that we ignore at our peril.

Will we recognise that by departing from the ‘gold standard’ of the word of God we have brought all this trouble upon ourselves? And will we come humbly before God seeking his ways that lead to blessing and prosperity?

It may be that God has allowed the Carillion economic disaster to come upon us as a warning sign to the nation that all is not well; and that unless we face up to the bigger moral and spiritual problems in the nation we will never get the economy right or solve the nation’s social problems.