IN FULL, THE CAR-CRASH MANIFESTO
Share ownership
British firms with more than 250 staff would be forced to hand over 10 per cent of their value to staff.
Why it won’t work: It will destroy the value of major UK firms, discourage investment and hammer pension funds. It could lead to cuts in wages and benefits as firms try to save money, and because the rule does not apply to foreign firms, it could encourage companies to leave. Hidden in the small print are plans for billions to go to the State as a ‘social dividend’, otherwise known as a tax.
Re-nationalise water industry
All the major water companies would be taken back into State ownership and company bosses sacked. Why it won’t work: Put aside the major questions about how John McDonnell can nationalise the £90billion water industry for next to nothing, as he claims, and the catastrophic signal that would send to investors. The idea of putting major firms in the control of councils and unions is a recipe for sclerotic 1970s inefficiency.
Abolish free schools and stop new academies
Free schools, which are allowed to operate independently, would be brought under the control of town halls. The academy programme, first set up by Tony Blair, would be frozen.
Why it won’t work: Why abolish a successful programme? The end of new academies marks a decisive break from a flagship Blairite reform.
New renters’ unions and rent controls
Housing spokesman John Healey said Labour would spend £20million on setting up ‘renters’ unions’ so tenants can ‘organise to defend their rights’ and cap the rents that private landlords can charge.
Why it won’t work: The Tories point out membership of the German tenants’ union costs the equivalent of £100 a year, and it is far from clear how a union can influence private decisions between renters and landlords. Rent controls discourage landlords from letting out property and reduce investment in housing stock, ultimately pushing prices up.
Holiday home tax
Owners of holiday homes would be hit with an annual tax of £3,000.
Why it won’t work: What qualifies as a holiday home? How do you measure when they are occupied? What if they are let out? The cost of the bureaucratic hurdles to such a policy and the difficulties in collecting the tax could exceed the amount collected.
Maximum pay ratios
Mr McDonnell floated a 20:1 maximum pay ratio for all firms bidding for State contracts and hinted he could extend it across the private sector.
Why it won’t work: A maximum pay ratio would make it next to impossible for firms to hire top overseas and international talent, and would destroy the Premier League overnight because football clubs would be forced to cap stars’ pay.
Universal Credit
Labour would launch a year-long review of the benefits system and could scrap Universal Credit.
Why it won’t work: Abandoning Universal Credit would be hugely expensive and risks undermining Britain’s booming jobs market.
Re-nationalise railways
Franchises will be returned to State control. Why it won’t work:
However unreliable the railways are – largely due to Mr McDonnell’s friends in the militant rail unions – a return to the days of British Rail will only be worse.
Re-nationalise Royal Mail
Return Royal Mail to State ownership. Why it won’t work: As with all Mr McDonnell’s nationalisation projects, there’s no suggestion of how he’s going to pay for it. Could he try to take control without paying compensation? Or theft, as it’s also known.