“Building an economy for the many 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,” shadow chancellor John McDonnell told the Labour party's annual conference yesterday.
The CBI accused him of “misplaced nostalgia”.
Mr McDonnell said that, unlike the last Labour governments of Tony Blair and Gordon Brown, a Jeremy Corbyn government would turn its back on the use of private finance for construction projects and cancel all existing contracts.
“We have already pledged that there will be no new PFI deals signed by us. But we will go further. I can tell you today, it’s what you’ve been calling for. We’ll bring existing PFI contracts back in-house,” he said.
He also promised massive government investment in public sector infrastructure. “We’ll build Crossrail for the north, connecting our great northern cities from west coast to east, and extend HS2 into Scotland,” he said. “We’ll deliver the funding for Midlands Connect, overhauling transport across the Midlands. And we’ll overturn decades of neglect and lack of investment in the southwest. We’ll electrify railway lines from Cornwall right through to London.”
Carolyn Fairbairn, director-general of the bosses’ lobby group Confederation of British Industry (CBI), was appalled. “The shadow chancellor’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.”
She 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.”