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A shadow cabinet minister has warned that a Labour government’s drive to nationalise key industries could fail, if the party loses the first legal challenge to the controversial plans.
Jon Trickett, shadow minister for the Cabinet Office, told an audience at a Labour conference fringe event last Tuesday that the party expects stiff opposition to its pledge to take the railways, water companies, Royal Mail and National Grid back into public ownership.
“There can be no question that the best legal minds would be deployed to prevent the Labour Party from doing what we want to do,” he said. “We will attempt to choose the grounds on which the first legal contest will take place… We need to win it.”
Asset managers have expressed concern that a Labour government would not compensate owners for their shares at full market value, and could potentially force them to write down the value of stakes in their companies under scrutiny or sell their shares at a loss.
Trickett, MP for Hemsworth in West Yorkshire, was emphatic that Labour would be sensitive to the social concern around nationalisation, stating unequivocally that “we will not take actions which will imperil people’s pensions”.
He indicated while speaking at the event, hosted by the Junior Labour Lawyers arm of the Society of Labour Lawyers, that a key contested area would be whether providers are failing to live up to the terms of their existing contracts.
Speaking on the same panel, Gabbi Stopp, executive director of ProShare, the UK industry body for employee share plans, highlighted several potential challenges for a programme of nationalisation. She said: “If you’re going to compensate pension funds at less than market value they’ll have to take a writedown and that will hit how much they can pay pensioners. But you do have to pay all shareholders in the same class the same, pension fund or not.”
In a snap poll of nearly 250 Financial News readers published on September 9, 54.3% of executives said they would prefer a no-deal Brexit to a Corbyn-led government. The respondents saw a Conservative-led coalition as the most likely outcome of an election, followed by a Labour-led coalition. One respondent wrote: “I don’t like Corbyn but I hope that Jo Swinson and co could keep him in check.”
To contact the author of this story with feedback or news, email Dave Morris
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