Leaked Labour plans show cut-price plan for re-nationalisation
Jeremy Corbyn is reportedly looking to pay less than half the market value for water firms as part of Labour's re-nationalisation plans. Leaked plans circulated among the Labour front bench suggest shareholders would be offered compensation of less than £20bn, £24bn shy of their £44bn market value. The sum reportedly reflects the money already put into firms, but not the value of future profits.
Reports quote the briefing as saying: “Shareholder investment on the books of UK water and sewerage companies is less than £20bn…We think this is a better place to start than market values because it reflects how much shareholders have actually put into a company, and doesn’t incorporate future expected profits, which will not exist under public ownership.”
The document also reportedly notes the final amount will be decided through a “political process of negotiation with shareholders,” which would assess the impact on pension funds as well as “asset stripping since privatisation”. “The final level of compensation may well be less than this,” it added.
Chief executive of Water UK, Michael Roberts, said in response: “It would be an absolutely devastating blow to for millions of pensioners if the water industry was subject to a smash and grab raid by a future government paying well below the market value for it. More than five million pensioners have funds invested in the water industry – including very many public sector workers – and they would lose thousands of pounds each under these leaked plans.
“It’s becoming clearer by the day that the financial case for nationalising the water industry doesn’t stack up. As well as hurting pensioners, it would land taxpayers with a multi-billion pound bill.”