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McDonnell's dismissal of nationalisation costs is laughable

    Daniel Mahoney, CPS Head of Economic Research, responds to SMF study on costs of nationalising the English water industry:
    “Two weeks ago, John McDonnell was confronted on the Andrew Marr Show about the CPS’s estimate that nationalising the water sector would have an upfront cost of £86bn. McDonnell dismissed this figure as ‘laughable’. Yet the only thing laughable about the figure of £86bn is that it could even be an underestimate. The figure might be nearer to £90bn, according to the Social Market Foundation.
    “If Labour persist in dismissing these figures and continue arguing that it will be for parliament to determine the price, this can only mean one thing: McDonnell is planning to seize assets well below their commercial value in all of the sectors that they plan to nationalise. This would lead to catastrophic consequences for business confidence as well as pension funds that are heavy investors in utilities. 
    “It is now more urgent than ever that Labour are straight with the public about how much they plan to borrow for their nationalisation plans”.


    1. Daniel Mahoney is the author of “The Cost of Nationalisation”, published by the Centre for Policy Studies Sunday 21 January 2018.
    2. “The Cost of Nationalisation” estimates that the commercial upfront cost of Labour’s Nationalisation would be at least £176bn. Broken down by sector, it argues that Labour’s plans would cost £55.4bn for energy networks, £86.25bn for the water companies, £4.5bn for Royal Mail and a potential £30bn for PFI nationalisation. 

    Date added: Monday 5th February 2018