Labour’s plans to renationalise utility companies, railways, and the Royal Mail would cost £196bn, according to the CBI.
That’s the equivalent of all the income tax paid by UK citizens in a year – and as much as the annual spend on the Health and Social Care budget (£141bn) and Education budget (£69bn ) combined.
Renationalisation would also have an ongoing impact (from maintenance and running costs and investment in future infrastructure needs), as well as a heavy impact on the UK’s public finances.
Britain’s largest business group estimates there could be a 10.7% increase in debt from bringing industries into government ownership, raising debt to levels not seen since the 1960s. Servicing this debt is expected to cost around £2 billion per year. While the Government’s assets would increase, and there would be the potential for revenue generated by these utilities, the confidence of international investors in the UK would be severely hit should Labour refuse to pay full market value for the industries.
Under Labour’s plans, savers and pensioners could also suffer an estimated £9 billion loss to their holdings, which translates into £327 for every household in the country.
Rain Newton-Smith, CBI Chief Economist, said: “The price tag for Labour’s renationalisation plans is beyond eye-watering – close to £200 billion. And that’s 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.
“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. These issues are what keep businesses up at night and what they want to see the Government get on with addressing.
“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.
“Investment in skills, infrastructure and innovation is how we will enable firms to grow, create jobs, and raise living standards in communities across the country – not by returning to failed, ideological economics that would make millions of people poorer in their old age.”