Radical Corbyn nationalisation plan could see firms paid LESS THAN HALF their value



05.05.2019 10:51

A Labour Government would fork out £24billion short of what the firms are estimated to be worth and leave shareholders at a loss of up to 50 percent on the value of their investments. According to The Sunday Times, a document being passed around Labour frontbenchers details the opposition leader’s plot to bring the companies back under public ownership. The blueprint outlined how a “political process of negotiation” would take place with shareholders - including pensioners and employees - and they would be compensated only for the money that have already invested, not the estimated value of future profits.

The briefing said: “The final level of compensation may well be less than this (£20billion).” If Mr Corbyn gets into power, he has said he would bring water, gas, railway and electricity firms under state control. The document seen by The Sunday Times said: “Shareholder investment on the books of UK water and sewerage companies is less than £20billion.“We think this is a better place to start than market values because it reflects how much shareholders have actually put into a company, and doesn’t incorporate future expected profits, which will not exist under public ownership.”

The water industry is valued at about £44billion by the Social Market Foundation and it estimates renationalising it would cost £90billion.But the leaked document said the £90billion figure and the Centre for Policy Studies’ estimate of £300bilion for Labour’s overall nationalisation programme are nothing more than “fantasy figures plucked from the air by politically motivated think tanks”.The leak comes a month after Thames Water added a clause to its bonds to ensure investors will be repaid if the company is nationalised. Labour has said that water companies owned by the public would bring an end to “rip-off” rates.

Starting in the 1980s, Margaret Thatcher privatised 10 large water firms, the largest being Thames Water, a process she claimed was “fundamental to improving Britain’s economic performance”. But the Tories say Labour’s nationalisation plans would cause business investment to “collapse” and the pound to “crash”. In 2017, shadow business secretary Rebecca Long-Bailey vowed Labour would “fix the broken system”. Speaking after it was announced water bill would fall by up to £25 from 2020, she said: “The water industry is failing the majority of consumers, and only radical action can correct this market."

A Labour party spokesperson said:"Water bills have risen 40 percent in real terms since privatisation."In the last ten years, water companies have paid 1,000 times more in dividends to their shareholders than in tax. Some have even paid more in dividends than they have made in profit, running up debts that are passed on to bill payers.“Labour will fix this broken system by bringing the water companies back into public ownership, saving households £100 per year on their bills.’’


express entertainment added by Cavan Bradford


There are no comments yet.

You must log in to post a comment.

Similar news