Labour is putting its plans for Britain in the hands of private finance. It could end badly | Daniela Gabor

Handing vital infrastructure to private investment companies will generate windfalls for investors and leave the rest of us worse off. We need a better plan

• Daniela Gabor is professor of economics and macrofinance at UWE Bristol

The Labour party has a plan for returning to power: it will get BlackRock to rebuild Britain. Its reasoning is straightforward. A cash-strapped government that wants to avoid tax increases or austerity has no choice but to partner with big finance, attracting private investment to rebuild the infrastructure that is crumbling after years of Tory underinvestment. Labour has already done the arithmetic: to mobilise 3 of private capital from institutional investors, you need to offer them 1 in public subsidies. But every time you hear Labour announce such an infrastructure partnership, think of the hidden politics. BlackRock will privatise Britain - our housing, education, health, nature and green energy - with our taxpayer money as sweetener.

BlackRock has long peddled the idea of public-private partnerships for infrastructure, climate and development. Yet its political momentum has recently accelerated. When its chair, Larry Fink, the world's most powerful financier, sat with world leaders at the G7 summit last month, he promised the following: rich countries need growth, infrastructure investment can deliver that growth, but public debt is too high for the state alone to invest the estimated $75tn (59tn) necessary by 2040. Trillions, however, are available to asset managers who look after our pensions and insurance contributions (BlackRock, the largest of these firms, manages about $10tn, as a shrinking welfare state pushes us - future pensioners - into its arms).

Daniela Gabor is professor of economics and macrofinance at UWE Bristol

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