Tuesday 2 July 2019 8:57 pm

Labour plays down BT renationalisation rumour

Labour played down rumours yesterday it was looking to renationalise BT in a move that would cost around £30 billion.

It was reported that advisers to Labour leader Jeremy Corbyn were considering a plan drawn up by the Communications Workers’ Union to bring the company back into public ownership.

Labour’s shadow chancellor John McDonnell poured cold water on the story, saying: “There will be a number of unions that will always raise their individual policies but no, we’re not looking at it.”

Despite his words, the notion of renationalisation once again sparked concerns over whether Labour would seek to pay the market price in the event of such a grab.

Last month Unison threw its weight behind Labour’s plan to nationalise parts of the energy market, issuing a report called Power to the People.

The party has already committed to bringing rail companies, energy suppliers, water companies and the Royal Mail into public ownership if it formed the next government, and pledged to allow MPs to set the rate of compensation for shareholders.

Dan Neidle, a partner at law firm Clifford Chance, has stressed that UK government’s traditionally renationalised companies at market value, adding: “You have to look to the likes of Venezuela to see examples of a government deliberately setting out to pay less than market value compensation.

“That’s not company that any British government of any political complexion wants to keep, and if any UK government did take the extraordinary step of nationalising for less than market value then pension funds and other institutional investors here and abroad would lose out, and in many cases they would sue.”

He also said that while BT’s market capital is around £20 billion, the company has another £10 billion of debt that would have to be accounted for.