Face of Nation : The employers’ group said the up-front cost of taking control of the water and energy utilities, train firms and Royal Mail was equivalent to all income tax paid by UK citizens in a year. It was the combined total of the £141bn health budget, and the £61bn spent on education, analysis by the CBI said.
A Labour Party spokesman said it was “incoherent scaremongering” by the CBI. The CBI’s report, published on Monday, estimated there could be a 10.7% increase in debt from bringing industries back into public ownership.
This would raise debt levels to 94% of GDP, their highest point since the 1960s, and would cost around £2bn per year, according to the study. It also claimed that under Labour’s plans, savers and pensioners could suffer an estimated £9bn loss to their holdings, which translates into £327 for every household in the country.
The CBI bases its analysis on the nationalisation of:
- Nine water and sewerage companies and seven water-only companies in England
- National Grid, and the electricity transmission and distribution networks
- Rail rolling stock
- Royal Mail
The report said the confidence of international investors in the UK would be “severely hit” if Labour refused to pay full market value for the industries.Although the analysis said that the state-owned assets would increase in value and there would be potential revenues generated, the study’s focus was on costs rather than estimates of potential benefits.
Rain Newton-Smith, the CBI’s chief economist, called the price tag “eye-watering”. And she said that £196bn was 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.
