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Labour plan 'as bad as hard Brexit'

CBI chief attacks ‘damaging’ nationalisation plan

Paul Drechsler

Paul Drechsler: ‘show me the evidence’

Labour’s plans to renationalise swathes of British industry would be as damaging as a hard Brexit, said the CBI president Paul Drechsler.

In a speech to senior business leaders in central London, Mr Drechsler said the UK must navigate its way between two “significant threats” – a hard Brexit and a nationalising ideology.

He warned that those proposing big changes such as these needed to prove they would create more jobs and investment, and improve living standards.

“Drop the ideology and focus on the evidence,” he said. “You want the hardest-of-hard Brexits? Show me the evidence that hard Brexit will deliver more jobs, prosperity and trade for our country.

“But if not, we have got the evidence on the best way forward. From thousands of conversations with thousands of businesses – a customs union, and a deep relationship with the single market.

Regarding Labour’s plans to renationalise Royal Mail, the railways and the energy industry, he said: “So you want to nationalise energy, rail and water, and bring public services contracts back in-house? Let’s see the evidence that it will deliver a better service to consumers at a lower cost.

He said: “The first lesson in business is: confidence is everything. And every day, I’m hearing of potential investors in this country reaching for their coats.

“Because they’re not going to risk putting their money into an economy that soon might face export barriers to its single biggest market, let alone invest in companies, assets and services that could soon be taken over by the state.

“Almost every day I hear of investment being postponed or cancelled or jobs being moved overseas. While we argue ideology, the world isn’t going to wait for us to catch up.”

He was more sympathetic to Labour’s support for a customs union and its call for a review of public-private sector programmes for delivering public assets.

He said lessons must be learnt from the collapse of Carillion and said a refreshed approach from the private sector and the Government is required to ensure there is a “true partnership” when delivering public services.

“The sorry collapse of Carillion was a wake-up call. It’s a sad thing when a business goes under,” said Mr Drechsler.

“In the aftermath, we need openness and honesty about what happened.

“But we must not lose perspective. Most public-private partnerships work well. Over 200,000 companies deliver contracts for the public sector. They can – and do – accelerate investment in communities at a time when public services are under pressure.

“Whether it’s new ways to care for elderly people, new schools, or upgrading our infrastructure. And they can do so efficiently.

“Yet I think one lesson from Carillion is already clear. A public-private partnership must be exactly that – a partnership.”

He warned that “low-cost deals may look cheap in the short-term, but that doesn’t mean they deliver value in the long-term”. 

On prospects for growth, he said: “UK businesses stand ready to seize the opportunities. To grow, provide jobs, and raise living standards. But this must be supported, not derailed, by taking the wrong choices for our country. Those choices are era-defining.”

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