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Public ownership will cost taxpayers absolutely nothing, John McDonnell says

He told a Labour gathering in London that public ownership is not just a “political decision” but an “economic necessity”.

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

The shadow chancellor’s comments came as he outlined an agenda to put public services “irreversibly in the hands of workers” so they can “never again be taken away”.

He told a Labour gathering in London that public ownership is not just a “political decision” but an “economic necessity”.

Mr McDonnell 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.

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Shadow chancellor John McDonnell attending a Labour Party conference on alternative models of ownership at the De Vere Grand Connaught Rooms in central London (Yui Mok/PA)

“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.

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Shadow chancellor John McDonnell attending a Labour Party conference on alternative models of ownership at the De Vere Grand Connaught Rooms in central London (Yui Mok/PA)

The shadow chancellor told Labour’s alternative models of ownership conference: “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.

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Shadow chancellor John McDonnell (Yui Mok/PA)

“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.”

The CBI’s 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.”

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John McDonnell speaking at the De Vere Grand Connaught Rooms (Yui Mok/PA)

Mr McDonnell announced the creation of a working group to look at how cooperatives can grow, expand and access capital, and to decide which sectors should be prioritised in the expansion of cooperative ownership.

He also accused the Conservatives of being “intellectually bankrupt”.

“Under the Tories, Britain is now seriously out of step with our international partners, failing to keep up with them.

“The Conservatives are intellectually bankrupt: caught between clinging on to the failing dogmas of the past and offering a pale imitation of the radical change which Jeremy Corbyn’s Labour Party now offers.”

Treasury Chief Secretary Liz Truss said: “Independent reports show Labour’s renationalisation plan will cost taxpayers billions and lead to worse services for people.

“Labour would put politicians in charge of running everything from the phone lines to electricity supply, meaning people have nowhere to turn when things go wrong. That didn’t work last time and won’t work this time.”

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