Allan warns of double threat
Labour and CBI clash over re-nationalisation plans
John Allan: ‘Labour’s plans will harm those they intend to help’
Shadow Chancellor John McDonnell has accused the CBI of “scaremongering” after its president delivered a stinging attack on Labour’s plans to bring swathes of industry under state control.
Business leaders attending the CBI annual dinner heard John Allan warn of the double threat of “Brexit and re-nationalisation”. Labour last week published plans to take the country’s £60 billion energy network back into public ownership.
Mr Allan told guests, who included the Chancellor Philip Hammond: “These plans will harm the people they are supposed to help.
“Nearly six million pensioners, employees who today benefit from an employee ownership scheme; and people dependent on charities which have invested in the industries under threat. People are now asking: is my money, my savings, my income at risk?
“Yet Labour’s proposals are not just a threat to these industries but to investment in our country at a time when it’s most needed. And above all, to that essential partnership between business and government.”
John McDonnell: ‘no employees will be worse off’ (pic: Terry Murden)
Mr McDonnell responded by saying the public believed that privatisation had not delivered on its promises. “This is disappointing scaremongering from the CBI, which continues to put shareholders first, despite claiming to understand that businesses need to change.
“The public know that privatisation has not delivered on its promises. Instead of a nation of shareholders, people have faced higher bills for worse services. Meanwhile shares and dividends have been concentrated in the hands of a wealthy few.
“Labour has been clear that no employees will be made worse off as a result of nationalisation, including employee shareholders. And everyone will benefit from using the billions being paid out in dividends and excessive interest payments to lower bills and increase investment.
“Across the world, public ownership of basic utilities such as water and energy are a normal part of the ‘essential partnership’ between business and government, providing affordable and reliable services. It is time the CBI caught up.”
On the Brexit impasse, Mr Allan told the CBI gathering: “One year ago, my predecessor, Paul Drechsler, stood on this stage and called for an end to the Brexit logjam. The negotiations, he said, had been held up at customs. And where are we now?
“Unthinkably, in much the same place and that has come at an ever-growing cost. £800 billion of financial capital moved out of the UK. In 2018, four successive quarters of falling investment, the longest such period since the financial crash. UK stockpiling at a rate unseen since records began. The closure, cancellation or relocation of great businesses and their production lines. And all the while our international competitors are pulling ahead.
“So, tonight I have a plea, from the heart of business, to the heart of politics. Resolve this gridlock. Do whatever it takes and do it fast. The Prime Minister’s decision to bring back the Withdrawal Bill in early June is one more opportunity for Parliament to resolve this mess.
“Parliament must seize that opportunity, if not, the uncertainty will become far more acute. It’s not for business leaders to tell politicians when to trigger democratic events. But be in no doubt political failure today means economic failure tomorrow. We need to find a way through.”