Nationalisation will cost taxpayers 'absolutely nothing' says McDonnell

The Shadow Chancellor says public ownership is an ‘economic necessity’

Labour’s plans to bring services into public ownership would cost taxpayers “absolutely nothing”, John McDonnell has said.

The Shadow Chancellor is due to outline plans to put democratically owned and managed public services “irreversibly in the hands of workers” so they can “never again be taken away”.

He will argue public ownership is not just a “political decision” but an “economic necessity”, and accuse an “intellectually bankrupt” Conservative Government of offering economic reforms which are no more than a “pale imitation” of the agenda put forward by Labour leader Jeremy Corbyn.

In interviews ahead of Labour’s Alternative Models of Ownership conference in London, Mr McDonell claimed his plans would not cost the taxpayer a penny.

He told Sky News: “It would be cost-neutral because you would be bringing into public ownership an asset.

“In addition to that, you would not just have an asset – that asset would give you income.

“Instead of that income going to shareholders, it would come to the taxpayer.”

Asked if public ownership would cost “absolutely nothing”, he replied: “Exactly that. In fact we believe, because we would manage it more effectively and we would cut out the drain of resources by the shareholders, we believe we would be able to reduce customer prices and invest in the industry and make it more efficient.”

Mr McDonnell’s comments sparked business concern, while critics suggested the plans would cost taxpayers billions of pounds.

The Confederation of British Industries’ (CBI) managing director for people and infrastructure, Neil Carberry, said: “Labour’s calls for nationalisation continue to miss the point. At a time when the UK must be seen more than ever as a great place to invest and create jobs, these proposals would simply wind the clock back on our economy.

“If Labour turns its back on good collaboration between the government and the private sector, public services, infrastructure and taxpayers will ultimately pay the price.”

In his speech, the Shadow Chancellor is expected to say: “The next Labour government will put democratically owned and managed public services irreversibly in the hands of workers, and of those who rely on their work.

“We will do this not only because it’s right, not only because it’s the most efficient way of running them, but also because the most important protection of our public services for the long term is for everyone to have and feel ownership of them.

“We aren’t going to take back control of these industries in order to put them into the hands of a remote bureaucracy, but to put them into the hands of all of you – so that they can never again be taken away.

“Public ownership is not just a political decision, it’s an economic necessity. We’ll move away from the failed privatisation model of the past, developing new democratic forms of ownership, joining other countries, regions and cities across the world in taking control of our essential services.”

Press Association