Mandelson's latest 'winner' in pension fraud?

I can't beat the beautiful job Richard Tyler did in yesterday's Telegraph on a classic example of winner-picking under our Lord and master's revived industrial policy, so I'll just quote bits of it. Click the links to read the articles - they are well-worth reading.

Staff at a company whose parent group was rescued by Lord Mandelson's taxpayer-funded venture fund have discovered that their pension payments have gone missing.

Chris Allner, head of private equity at Octopus Capital, one of two fund managers appointed by the Business Department to invest the £75m fund, said: "In respect of us investing taxpayer and bank money, we are comfortable that we did as much as we could to uncover all the potential and actual liabilities of the [KeTech] group."  

A spokesman for the Department for Business declined to comment on the investigation into the missing pension money but said the investment in KeTech would "help secure the future of more than 130 jobs which were at risk".

As some readers have commented on my blog, imagine owning and running a successful business, which still has bank support. Then you discover that your poorly run rival has not only been bailed out with public funds but it can now undercut you on price because they have been incentivised with cheap/free money to retain more staff than they actually need.

Lord Mandelson champions active government. He sees political mileage and economic benefit to be had from the state doing more. His "industrial activism" has industry excited. It likes the sound of central planning, certainty and government subsidies. But it wants to see how the strategy is to be implemented in practice.

Lord Mandelson tells me that his department can conduct surgical strikes that will ripple out and benefit the wider economy. "Our investments may be small but they can be disproportionately economically significant if those investments are taking place in the right, innovative, fast growing companies. That's how I would justify our activism," he says.

So I asked him if this meant heading back to a 1970s style of industrial policy where government tried to pick winning companies? He hesitated. "It's not picking winners. It's backing some winners but inevitably not all. Most will not need our help but those that do need our help, we should."

That's a "yes", then.