Business

Renationalisation would damage economy, warns CBI

Railway tracks Image copyright PA

Renationalisation of large parts of the economy would "seriously harm" the UK's reputation as a place to invest, a leading business group has warned.

CBI President, Paul Drechsler, told business leaders that such calls were driven by ideology, rather than facts.

"Era-defining choices" must be based on what is best for jobs, investment and living standards in the UK, he said.

The Labour Party has called for water, energy, and rail services to be brought under government control.

Shadow chancellor John McDonnell told the BBC last month that renationalising these services was an "economic necessity" that wouldn't cost the taxpayer anything.

But speaking at the CBI's annual dinner, Mr Drechsler said it disagreed with Labour's stance on this.

"In all, 45% of our infrastructure investment is being delivered through private investment," he said.

He said that the CBI believed this made such services cheaper and more efficient.

Image copyright PA

However, Mr Drechsler said the CBI did agree with Labour on the need for a customs union once the UK leaves the European Union.

"We have got the evidence on the best way forward [on Brexit]. From thousands of conversations with thousands of businesses - a customs union, and a deep relationship with the single market," he said.

Carillion warning

The CBI president also spoke about the recent collapse of construction giant Carillion, saying it did not mean public-private partnerships don't work.

"We must not lose perspective.

"Most public-private partnerships work well. Over 200,000 companies deliver contracts for the public sector. They can - and do - accelerate investment in communities at a time when public services are under pressure," he said.

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