A major programme of renationalisation under Labour would “not be a burden” on taxpayers, shadow chancellor John McDonnell has said.
Proposing an alternative vision ahead of Wednesday’s Budget, Mr McDonnell revealed that Labour would invest £250 billion over a 10-year period to help the UK “compete in a global market”.
Mr McDonnell denied that his programme of renationalisation was a “magic card trick” and claimed that profits from renationalised industries would cover the initial takeover cost.
Mr McDonnell, speaking to The Andrew Marr Show, said: “When you take them over you swap shares for government bonds and that is covered by the cost of those profitable industries we take over.
“It will be Parliament who sets the price on any of those nationalisations, what I would say is cost is always covered because these are profitable industries and that will cover the cost of any borrowing. It will not be a burden on taxpayers.”
He added: “What we are saying is we invest £250 billion over a 10-year programme so about £25 billion a year.
“This is nothing untoward with what past governments have done, if we don’t do this we’re not keeping up with our competitors across Europe, the US and elsewhere.
“When you invest those sums you get a return on that investment that covers any cost of borrowing.”
Mr McDonnell said the funds would be spent through a strategic investment board that brings together government and business.
He added: “That way we will get the best deal but more importantly we will be able to compete in a global market.”
Earlier this week, Mr McDonnell said a Labour government would spend an extra £17 billion a year on the NHS, education and local government while ending the public sector pay cap.
Setting out Labour’s demands for the Budget, he has also urged a large-scale public house-building programme, funding for infrastructure and the pausing and fixing of Universal Credit.
Chief Secretary to the Treasury Liz Truss derided Labour’s plan, saying: “John McDonnell’s borrowing binge shows exactly why Labour is not fit to govern.
“When asked repeatedly how much Labour’s spending commitments would cost, the shadow chancellor was unable to say. No wonder Labour are preparing for a run on the pound.
“Labour’s costs would spiral out of control, meaning more debt and higher taxes – with working people paying the price.”