The up-front cost of the Labour Party’s renationalisation proposals for water and energy utilities, train companies and Royal Mail is £196bn, according to new analysis by the Confederation of British Industries (CBI).
The bosses' association commented this was equivalent to “taking every penny of income tax paid by UK citizens in a single year – and also as much as the annual spend on the health and social care budget (£141 billion) and education budget (£69 billion) combined”.
The CBI further pointed out there would be additional ongoing costs for maintenance, operation and investment, and that there would be a heavy impact on the UK’s public finances. It found debt would increase by 10.7%, “raising debt to levels not seen since the 1960s” and that servicing this debt would cost around £2bn per year. Moreover, savers and pensioners could suffer an estimated £9bn loss to their holdings, which translates into £327 for every household in the country.
CBI chief economist, Rain Newton-Smith (pictured), called the price tag for the plans “beyond eye-watering”, adding: “There are so many other genuine priorities for public spending right now, from investing in our young people to the transition to low-carbon economy and connecting our cities and communities… Firms want politicians to invest in major infrastructure projects rather than undermine confidence in our economy and waste time, energy and public money in a renationalisation project with no clear benefits.”
Water UK chief executive Michael Roberts commented: “This important work by the CBI makes an iron-clad case against nationalisation, and is part of an ever-growing body of evidence showing what a bad idea it is.”