Labour water privatisation ‘to cost £90bn’

LABOUR’S plans to nationalise the water industry could cost taxpayers up to £90billion, a think-tank has said.

The huge sum would have to be paid to acquire the privatised water firms from shareholders and investors, according to the Social Market Foundation.

Funding such purchases with borrowed money would add 5 per cent to the national debt, it warned in a report.

The study was commissioned by water companies including United Utilities, Anglian Water, Severn Trent and South West Water, but the SMF said the calculation has been published independently.

Shadow Chancellor John McDonnell, who pledged to nationalise water in Labour’s election manifesto, claimed the policy would not cost a penny.

He said: ‘This is a report by a Right-wing think-tank… and commissioned on behalf of the water industry.’

The report found that a government that chose to buy the English water industry at fair market prices would pay between £87billion and £90billion to acquire the private firms.

The SMF said forcing through a sale at lower prices would reduce upfront costs to taxpayers but would cost the economy as investors in other sectors either deserted the country or demanded a risk premium to invest in the UK.