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Labour’s renationalisation plans will cost at least £196bn, the Confederation of British Industry (CBI) has claimed.
The party’s proposals to take water and energy utilities, train companies and the Royal Mail into public ownership would cost the equivalent of taking all income tax paid by UK citizens in a single year, according to the organisation.
And the price tag is also comparable to the combined annual spend of £141bn on the health and social care budget, and £69bn on education, CBI analysis said.
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The business group estimates there could be a 10.7 per cent increase in debt from bringing industries into public ownership, which would see debt levels at their highest since the Sixties.
Servicing this debt could cost about £2bn per year, according to the CBI report.
1/50 11 October 2019
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1/50 11 October 2019
Richard Ratcliffe, husband of British-Iranian aid worker Nazanin Zaghari-Ratcliffe jailed in Tehran since 2016, holds his daughter Gabriella during a news conference in London. Their five-year-old daughter has arrived back in Britain, after making the “bittersweet” decision to bring her home
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EPA/Noel Mullen
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7/50 5 October 2019
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21/50 21 September 2019
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50/50 23 August 2019
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A Labour Party spokesman accused the CBI of “scaremongering”.
The analysis said the government’s assets would increase, and there would be the potential for revenue generated by utilities, but the study focused on the cost of renationalisation and did not seek to estimate potential benefits.
The report said confidence of international investors in the UK would be “severely hit” if Labour refused to pay full market value for the industries.
It also claimed savers and pensioners could also suffer an estimated £9bn loss to their holdings.
Rain Newton-Smith, CBI chief economist, said: “The price tag for Labour’s renationalisation plans is beyond eye-watering – and that’s only the starting point.
“It doesn’t take into account the maintenance and development of the infrastructure, the trickle down hit to pension pots and savings accounts, or the impact on the country’s public finances.
“Firms want politicians to invest in major infrastructure projects rather than undermine confidence in our economy and waste time, energy and public money in a renationalisation project with no clear benefits.”
Labour claimed the CBI is more interested in protecting shareholders than in creating a fair economy.
A party spokesman said: “This is incoherent scaremongering from the CBI, which is bizarrely attacking Labour for compensating shareholders both too much and too little.
“It is disappointing that the CBI seems incapable of having a grown up conversation about public ownership – which is hugely popular, and common across Europe.”
The CBI said its analysis covered renationalisation for nine regional water and sewerage regional monopolies, and the seven water only companies in England.
It also included the National Grid, the electricity transmission networks, the distribution network operators and gas distribution networks in England, Scotland and Wales, as well as the rail rolling stock and Royal Mail.
Press Association contributed to this report.
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