Labour’s plans to bring large chunks of the economy into public ownership, including water and the energy networks, would cause serious harm to the UK’s reputation as an investment location and a home for business, the Confederation of British Industry (CBI) president has warned.

In his speech at the industry body’s annual dinner in London last night (12 March), Paul Drechsler said the opposition’s plans to reverse privatisation ranked alongside hard Brexit in terms of the damage that it could cause to the UK economy.

The CBI caused some raised eyebrows in the City when it recently endorsed Labour leader Jeremy Corbyn’s commitment to remain a member of a customs union arrangement with the EU.

However, Drechsler told his audience that hard Brexit and Labour’s renationalisation pledge are both underpinned by a focus on ideology over evidence.

“Let’s see the evidence that it will deliver a better service to consumers at a lower cost. There are things we can agree on with Labour. Including their backing of the CBI’s customs union proposal. But their policies on nationalisation aren’t driven by evidence. They’re driven by ideology.

“And it’s our job to bring the debate back to the evidence. Since the early 1990s, private energy companies have helped us cut the UK’s emissions by over 40 per cent, while our economy has grown by two thirds.

“Our clean energy industry is transforming how we power our country. The cost of offshore wind has fallen by half in the past two years alone. And it employs thousands in high-skilled jobs.

“Then there’s what’s been achieved by the private water companies. The quality of our water is among the best in the world. Leaks have been cut by a third.

“In all, 45 per cent of our infrastructure investment is being delivered through private investment. Yet all these industries – energy, water and rail –  are in line to be taken into state ownership under Labour.”

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