CBI denounces Labour’s renationalisation plans

LABOUR’S renationalisation plans would cost the equivalent of all the income tax paid by UK citizens in a year, according to business group the CBI, who have costed the proposals at almost £200 billion.

The organisation claims bringing the water and energy utilities, train companies and Royal Mail into public ownership would cost taxpayers £196 billion – more than the yearly Health and Social Care budget. That calculation only takes into account the upfront costs of buying back the industries and does not include money that would be spent on maintenance, running costs and other investment needs.

Labour reacted with anger to the analysis, describing it as “incoherent scaremongering”, and disputing the assumption that the party would pay 30 per cent above the asset value of private companies.

Rain Newton-smith, the CBI’S chief economist, described the cost of La- bour’s renationalisation plans as “beyond eye-watering”, adding: “That’s only 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.”

One of the more contentious issues of the proposals is how much shareholders would be compensated for the takeover of the companies by the government, with shadow chancellor John Mcdonnell committing only to hold a consultation over how a final figure would be arrived at. Shareholders would be compensated with government-backed bonds, which would earn interest every year, as opposed to shares, which pay out a dividend.

The CBI claim that the UK’S national debt could soar by 10.7 per cent as a result of the renationalisation plans, which in turn would lead to an additional £2billion a year in interest payments.