The cost of Labour’s energy renationalisation plans could total £55.4 billion, if only the transmission and distribution networks were taken under government control.
That’s according to a new report from the Centre for Policy Studies (CPS), which suggests a wider renationalisation of the energy sector could see the final total rise as high as £306 billion.
The cost of nationalising the water sector could cost an additional £86.25 billion.
The CPS says despite the substantial risks associated with nationalising utilities, there is little evidence to suggest consumers have anything to gain.
It suggests UK domestic electricity prices are fairly average for Europe, with Irish and German consumers paying higher prices than those in the UK, despite having a high degree of government ownership in the energy sector.
The CPS claims Shadow Chancellor John McDonnell has refused to provide any estimates of how much Labour’s nationalisation plans would cost or details of how they would work in practice.
The party has argued there would be no cost to renationalisation because the profits from the firms acquired would cover the borrowing – however, it has also promised to use these same profits to cut bills by £220 per household.
Daniel Mahoney, Deputy Director and Head of Economic Research at CPS, said: “Labour refuses to cost its plans for renationalisation and it’s easy to see why.
“John McDonnell’s claim that bills will fall by £220 after nationalisation does not stand up to scrutiny.”