The dangers of renationalisation form the centrepiece of CBI Director-General’s Roscoe Lecture

Delivering one of this year’s Roscoe Lectures at Liverpool John Moore’s University, CBI Director-General Carolyn Fairbairn warned against the consequences of Labour’s plans to re-nationalise utilities and railways.

She highlighted that with nearly 8 million pension pots invested in businesses Labour wants to re-nationalise, workers and older generations could end up poorer as a result.

She also asked whether it’s the best way to use the £176bn the Centre for Policy Studies has estimated it to cost.

And she nodded to the damage already being done to investor confidence, just when we need that reputation to be strengthened.

Calling the plan “the biggest departure from economic consensus that politics has seen for 30 years”, she provided evidence from UK experience to suggest it “would do profound harm to our economy, to the services on which we rely, and to our country’s finances”.

Celebrating achievements

Importantly, Carolyn also pointed to achievements delivered by the businesses since privatisation.

“Since the 1980s, our energy sector has reduced the number of power cuts by half. At same time as cutting carbon emissions by half,” she said.

“Then there’s our private water companies. Who put twice as much money into the system as the government ever did. Have cut leaks by a third. And have helped make our rivers and beaches some of the cleanest in the world.”

And while acknowledging “very real problems” on the railways, she added: “Twice as many people use our railways now as they ever did under British Rail. The crowding we experience now is because the privatised railways are a victim of their own success.”

Finding solutions

The speech is the most high-profile intervention on this topic from the CBI to date, following a piece by CBI President John Allan in the Telegraph and Carolyn’s speech at the CBI Annual Conference, both last November.

It forms part of wider work by the CBI to champion the private sector’s contribution to infrastructure and public services, and ongoing engagement with the Labour Party on the issue.

This includes CBI’s own proposals – highlighted in the speech – to improve accountability among firms involved in delivering the UK’s infrastructure and public services.

These include automatically shifting consumers onto the lowest tariffs or offering compensation when things go wrong; shareholder dividends only being paid if a company has delivered for its customers; and companies demonstrating how they will bolster local business.

“The conversation between business and the Labour Party must continue,” she concluded. “We believe they are asking the right questions. But by working with business – and not against it – we believe they can find much better answers.”

Read the full transcript