Britain’s business business lobby has said Labour’s ambitious plans to re-nationalise the Royal Mail, water companies, and train companies would cost the taxpayer £196bn.
The Confederation of British Industry (CBI) said on Monday that the estimated cost of re-nationalisation would be equivalent to the combined annual government spend on education, health, and social care. The CBI predicted that Labour’s plans would also inflate the national debt by over 10% to levels not sen since the 1960s. Debt servicing costs would rise to £2bn per year.
“The price tag for Labour’s renationalisation plans is beyond eye-watering – close to £200bn,” Rain Newton-Smith, the CBI’s chief economist, said in a statement. “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 CBI estimate that pensioners would lose £9bn under the re-nationalisation plans, as Labour have proposed taking control of utilities and services at below market rates.
A Labour Party spokesman told the BBC it was "incoherent scaremongering" by the CBI.
The spokesman said: "It is disappointing that the CBI seems incapable of having a grown-up conversation about public ownership - which is hugely popular, and common across Europe. It sadly reveals that they are more interested in protecting shareholders than in creating a fair economy."
Labour said in its 2017 election manifesto that re-nationalisation would “deliver lower prices, more accountability and a more sustainable economy.” Labour leader Jeremy Corbyn repeated a pledge to bring “rail, mail, water and the energy grid into public ownership” in an “alternative Queen’s speech” delivered in Northampton on Friday.
Newton-Smith said the policies would mean “returning to failed, ideological economics that would make millions of people poorer in their old age.” He called on Labour to prioritise things like “investing in our young people... the transition to low carbon economy and connecting our cities and communities.”
The CBI represents over 190,000 UK businesses who employ around 7m people. The group is the biggest business lobby in the UK.