CBI is wrong to see cost as big issue in Labour's nationalisation plans | Nils Pratley

Details such as fair purchase prices and effect on foreign investment are what really need explaining

The Confederation of British Industry is barking up the wrong tree when it howls about the “eye-watering” cost of Labour’s nationalisation plans, which it puts at almost £200bn. Of all the arguments against nationalisation – and there are many strong ones – the claimed upfront cost is the weakest.

The CBI skips over the fact that the companies on Labour’s list generate profits and cash. Viewed through a pure mergers and acquisitions lens, one could even regard a £200bn takeover as cashflow-enhancing for the state since the CBI itself puts the additional interest costs at £2bn, a sum that might be covered comfortably by the newly acquired companies. Severn Trent and United Utilities made post-tax profits between them of almost £700m last year, and they are only two of 10 major water companies.

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from Mergers and acquisitions | The Guardian https://ift.tt/2MeTVPt