Economic plan takes UK ‘back to the 1970s’

A LABOUR plan to nationalise industries and take over private finance initiative contracts would take the economy back to the Seventies and send investors “running for the hills”, it was claimed last night.

The Confederation of British Industry said Labour’s economic policy is “the wrong plan at the wrong time” while the Institute for Fiscal Studies said it would cost “an awful lot upfront”.

Taking over existing private finance initiative (PFI) contracts would cost up to £200billion, while Labour’s plans to nationalise rail, water and energy would double that amount, estimates suggest.

In his speech to the party’s annual conference John Mcdonnell, the shadow chancellor, pledged to deliver a pay rise for the low paid, renationalise key industries and turn around decades of PFI contracts which cost the NHS billions by taking them back in-house.

PFI, which was introduced by John Major in 1992, uses private capital for new schools, hospitals and other national infrastructure, paid back with interest by the taxpayer over decades.

Mr Mcdonnell wants to ban future PFI deals and nationalise some of the existing contracts by issuing government bonds to private firms in lieu of future payments. Mr Mcdonnell said: “Jeremy Corbyn has made it clear that, under his leadership, never again will this waste of taxpayer money be used to subsidise the profits of shareholders, often based in offshore tax havens.”

Carolyn Fairbairn, the CBI directorgeneral, said: “Forced nationalisation of large parts of British industry will send investors running for the hills, and puts misplaced nostalgia ahead of progressive vision.”