Labour nationalisation plan to cost UK $250bn, says CBI

Bloomberg

Jeremy Corbyn’s promise to take UK privatised companies back into public ownership if his Labour Party wins power will cost almost $250 billion, according to the Confederation of British Industry (CBI).
In an analysis published on Monday, the business lobby said the 196 billion-pound cost of nationalising the energy, water and rail industries, plus the postal service, will push government debt above 2 trillion pounds to 94% of GDP — levels not seen since the 1960s.
The proposal to unpick the privatisations that began in the 1980s has hit the market value of companies including Severn Trent Plc and National Grid Plc and raised fears that billions of pounds of debt could be added to an already stretched national balance sheet.
Labour says the cost of the borrowing would be covered by the profits from the industries, though the CBI warned that the confidence of international investors would be “severely hit’’ if Labour refuses to pay full market value, as is widely expected.
“The price tag for Labour’s renationalisation plans is beyond eye-watering,’’ said CBI Chief Economist Rain Newton-Smith. “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.’’
The projection is higher than the 176 billion pounds estimated last year by the Centre for Policy Studies, a right-leaning think tank. The CBI said its calculation is equivalent to the amount of income tax paid by UK citizens each year.