Shropshire Star

Labour's nationalisation plans would cost £200 billion, says CBI

Labour's nationalisation plans would cost the UK economy nearly £200 billion and could wreck public finances, the Confederation of British Industry warned today.

Published

Jeremy Corbyn has said he would nationalise water and energy suppliers, train operators and Royal Mail if he wins the next General Election.

But the move would be an unmitigated disaster according to the CBI, which said the "beyond eye-watering" price tag would serve as a hammer blow to Britain's economy.

Economists from the CBI, which represents thousands of large businesses, said the plans would cost £196 billion up front, almost as much as the combined annual spending on the NHS, social care and education.

The CBI said the nationalisation projects would have "no clear benefits" and would leave millions of Brits poorer.

Shropshire's Tory MPs said the figures were proof of Labour's 'economic illiteracy', and were driven by purely ideological motives.

But Labour accused the CBI of scaremongering, saying the figures were exaggerated.

The CBI said the plans would bring about a 10.7 per cent increase in debt, taking it to levels not seen since the raising debt to levels not seen since the 1960s.

The report added that the cost of servicing the debt would cost about £2 billion per year.

Philip Dunne, MP for Ludlow, said the extra costs would have a big impact on tax revenues and public services.

"This shows the economic illiteracy of the current Labour leadership," he said.

"Their plans would, if Labour won the next General Election, would bankrupt the country for purely ideological purposes."

He said the plans would also lead to a fall in tax receipts, meaning there would be less money to spend on public services.

Mr Pritchard said the plans represented one of Jeremy Corbyn's most reckless promises.

"This policy would lead to the single biggest increase in taxes in a generation, and a subsequent cut in nurses, teachers and police officers as Labour scrambled to pay off international loans and debt.

"It is driven by blind ideology rather than common sense."

Owen Paterson, MP for North Shropshire, added: "These plans are absolutely ridiculous.

"Privatisation has bought huge investment in these services that would not have been available from the Treasury."

He said people whose pensions had been invested in these companies would also suffer.

"It will mean my least well-off constituents will get worse services that would be more expensive."

Dylan Harrison, who will contest The Wrekin seat for the Labour Party at the next election, said the CBI had a vested interest in protecting private industry.

"These figures are exaggerated, it's a bit of a scare story," he said.

"The figures presume a 'big bang' to nationalise everything at the same time, whereas the reality is that there would be a timetable to spread the cost out."

Mr Harrison said some of the energy companies had seen a big drop in share price, which would also reduce the cost.

He said the privatised energy industry had been slow to embrace green technologies, adding that he was concerned about a fall in the number of energy companies which could create a public monopoly.