Why are we even discussing this? the CBI really IS scaremongering over Labour’s nationalisation plans
The Confederation of British Industry has started its usual pre-election campaign against the Labour Party – with the usual nonsense claims about Labour nationalisation policies.
It seems we are being asked to believe that bringing national utilities, the railways and the Royal Mail back into public ownership will cost the Treasury £196 billion, with no concurrent benefits to the economy.
I have to agree with Labour on this; it is nothing but scaremongering – and not very clever scaremongering, at that.
For a start, most of the utilities and railway firms Labour wants to take back into public ownership are currently owned by foreign firms – many of them owned by foreign governments.
That’s a lot of UK citizens’ money going abroad, right there. Bringing those firms back into public ownership would bring huge amounts of money back into the UK economy, instead of subsidising services in other lands.
We have been led to believe that Vince Cable sold our Royal Mail to hedge funds. Who knows where they’re putting the profits? That cash certainly doesn’t seem to be going back into the business. A tax haven, perhaps?
If so, then bringing the Royal Mail back into public ownership not only safeguards our postal service but brings huge amounts of money back into the UK economy.
That’s just off the top of my head.
The CBI admits its analysis is flawed, in that it only concentrates on the costs of any renationalisation, and explicitly does not consider any benefits.
The claims of this organisation have no value at all.
Have YOU donated to my crowdfunding appeal, raising funds to fight false libel claims by TV celebrities who should know better? These court cases cost a lot of money so every penny will help ensure that wealth doesn’t beat justice.
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Initial problems with ” the Study”
1) Not a study, A guesstimate of the highest prices A Labour Government might pay if they bought out on day one
Nine water and sewerage companies and seven water-only companies in England
National Grid, and the electricity transmission and distribution networks
Rail rolling stock
Royal Mail
2) Presumes a big bang, which is not and never was the plan
3) Ignores the diversity of models of privatisations – some of which are not proposed privatisations at all – but expanding the provider base by supporting and developing alternative mutual and government owned models to enter the market in competition
4) Has no analysis of the diversion of funding from subsidies (money we would be already spending) to cover the cost of any compensation issues (especially in terms of TOCs and rolling stocks) In fact ignores how much ongoing spending already goes into all these so call private companies
5) Also ignores the valuable investment opportunities for major private funds at point 3
Yes I did look at other responses directly the CBI and picked up the extra points
6) No even attempt to cost the value and increasing value of the assets owned or the potential revenues to be achieved (like the government were not going to be managing going concerns or involving themselves profitable industries ) (IFS)
and
7) Trying to argue to opposing positions either the costs would be top dollar (and the public loses out) or the current owners (pension funds etc) are going to be ripped of and devalued, It can be neither but it cannot be both
Need to understand the function of a special interest group
I still prefer the OBR, IFS and major international economists for a balanced view
Edit: the other thing that niggled at me about the CBI CEO speech was the idea that she admitted that the Labour Party had examined the right questions – value for money, accountability etc, But then went on to say that renationalisation was not the answer, That business was the best place to answer the very real concerns, Well if they were, would they not have already done so. Sounds like scaremongering and whataboutary to cover for the failings of private business.
People need to ask themselves where is all the investment these private sector enterprises were supposed to bring in, our railways look no different now than they did 50 years ago, apart from ticket machines replacing real people.