Labour renationalisation plans would cost 'eye-watering' 拢196bn, says CBI
The CBI also聽estimates there could be a 10.7% increase in debt as a result of the plans.
Monday 14 October 2019 09:54, UK
Labour's plans to renationalise water and energy utilities, train companies and the Royal Mail would cost at least 拢196bn, according to the Confederation of British Industry.
This is equivalent to all of the income tax paid by UK citizens in a single year. It is also as much as the annual budgets for health, social care, and education combined.
Under plans proposed by Labour, the nine water and sewerage regional monopolies and the seven water only companies in England would be renationalised.
This is in addition to the National Grid, the electricity transmission networks, the gas distribution networks in England, Scotland and Wales, the rail rolling stock, and the Royal Mail.
The CBI warned that in addition to the price tag of taking those companies public again, renationalisation would also have ongoing costs, such as maintenance and investment in future infrastructure needs.
Labour called the analysis "incoherent scaremongering."
"It is disappointing that the CBI seems incapable of having a grownup conversation about public ownership - which is hugely popular and common across Europe," a labour spokesperson said.
"It sadly reveals that they are more interested in protecting shareholders than in creating a fair economy."
Labelling the cost of Labour's renationalisation plan "beyond eye-watering", Rain Newton-Smith, CBI's chief economist, said that the initial price of nearly £200bn would only be 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," said Ms Newton-Smith.
The CBI also estimated there could be a 10.7% increase in debt from bringing industries into government ownership, raising debt to levels not seen since the 1960s.
It predicts the servicing of this debt to cost around £2bn per year.
While the government's assets would increase, and there would be the potential for revenue generated by these utilities, the CBI said that the confidence of international investors in the UK could be severely hit should Labour refuse to pay full market value for the industries.