Labour gets tough on privatisation
JOHN McDonnell has unveiled plans for a cull of water company bosses after renationalisation, with executive and director level jobs to be re-advertised on “dramatically reduced” salaries.
Denouncing the “scandal” of a privatised industry which has paid out £18 billion in dividends while bills rose 40% in real terms, Mr McDonnell set out plans for a new system of Regional Water Authorities (RWAs) made up of councillors and worker, consumer and environmental representatives.
Shareholders in the existing private companies would be compensated with bonds in a way which would be “cost neutral” for the taxpayer, said Mr McDonnell.
But Labour made clear that payments to shareholders could be slashed if there is evidence of asset-stripping, pension fund deficits or state subsidies since privatisation.
Details of the nationalisation plans came as Mr McDonnell declared Labour was ready for a snap general election and urged the Government to “Bring it on”.
In a keynote speech to the party’s annual conference in Liverpool, the shadow chancellor said Labour was “planned, ready and prepared” to force through a radical programme of nationalisation as soon as it won office.
And he won loud applause as he said: “Whenever the general election comes, we are ready. Ready to campaign for victory, ready for government, ready to build the future. And ... we’ll be proud to call that future socialism.”
Mr McDonnell confirmed plans for a Public and Community Ownership Unit in the Treasury to handle the planned return of water, energy, rail and the Royal Mail to public ownership.
“The full weight of the Treasury will be used to take on any vested interests that try to thwart the will of the people,” he said.
In the case of water, he said all staff would be transferred in their current roles to the new public-sector industry, except for senior executives and directors – whose roles would be re-advertised at rates capped by Labour’s planned 20-to-one pay ratio between the highest and lowest earning staff in public bodies.
He confirmed plans to put employees on company boards and create Inclusive Ownership Funds to hand 10% of privatesector firms’ equity to workers, who stand to pocket annual dividends of up to £500.
Business group the CBI warned that Labour policies would cause a drop in living standards for workers and customers.
And Adam Marshall, director general of the British Chambers of Commerce, said: “Labour’s proposals are both a tax grab and an unprecedented overreach into the way many of our businesses are run.”
Meanwhile, Labour frontbencher Richard Burgon hit out last night at “vocal advocates of bombing” among the party’s MPs.
At a conference fringe event he accused some of his colleagues of being “intensely relaxed” about UK weapons sales to regimes like Saudi Arabia.