'Wrong plan at wrong time'
CBI says Labour’s intervention will worsen Brexit woes
Carolyn Fairbairn: wrong plan at wrong time
Business lobby group the CBI has warned that Labour’s plans for wholesale state intervention in the economy would add further delays to stalled investment caused by Brexit.
Shadow Chancellor John McDonnell told the Labour conference that the party would renationalise rail, water, energy and the Royal Mail. It would also bring “wasteful” private finance initiative (PFI) contracts back in-house and
“Building an economy for the many also means bringing ownership and control of the utilities and key services into the hands of people who use and work in them. Rail, water, energy, Royal Mail: we’re taking them back,” he told the party’s annual conference in Brighton.
But Carolyn Fairbairn, CBI director-general, said Mr McDonnell’s vision of massive state intervention is the “wrong plan at the wrong time”.
She said it “raises a warning flag over the British economy at a critical time for our country’s future.”
Ms Fairbairn added: “Business and politicians share a determination to create a fairer society in which everyone benefits. But the trickle of stalled investments caused by Brexit uncertainty could become a flood if these plans were to become reality. This would threaten the living standards of the very people that need help, from pensioners to students.
“Forced nationalisation of large parts of British industry will send investors running for the hills, and puts misplaced nostalgia ahead of progressive vision.
“Where Labour has engaged with business – from Brexit and skills to infrastructure and innovation – solutions have been found to deliver an economy that is both more prosperous and fairer.
“The CBI looks forward to urgent discussion with the Labour leadership to find better solutions to the shared challenges we face.”
John McDonnell: ‘no new deals’
Mr McDonnell said that PFI contracts were set to cost the taxpayer £200 billion over the coming decades and private companies were making “huge profits”.
He said: “Jeremy Corbyn has made it clear that under his leadership, Labour will sign no new PFI deals. Never again will this waste of taxpayer money be used to subsidise the profits of shareholders, often based in offshore tax havens.
“I can tell you today that when we go into Government. We’ll bring these contracts and staff back in-house.”
Labour sources, however, later said all PFI contracts would be “reviewed”.
The PFI model of funding new schools and hospitals – in which the private sector meets the cost of building and then charges interest to the public sector – was pioneered by the Conservatives in the 1990s and has operated under various governments, including the SNP administration in Scotland.
Labour’s Brexit spokesman said Britain could stay in the single market and customs union with the European Union after leaving the bloc if Labour win power.
Keir Starmer said the party was ready to be “the grown-ups in the room” and take charge of negotiations to leave the EU.
He cautioned against taking anything off the table when looking at Britain’s future ties with the EU.
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