Will tax payer spend £100bn on water?
Analysts at Macquarie are sceptical over future government plans to renationalise key utility assets, including energy and water. They estimate a prohibitive £100bn bill for the UK tax payer to take ownership of the nation’s water reservoirs and supply networks.
While the current Conservative minority government has not such plans, renationalising vital utility assets was among Labour’s pre-election pledges. Polls since the 8 June General Election show a strengthening of public support for Jeremy Corbyn’s party.
But Macquarie argues that, even if Labour was to form a government down the line, financing this promise would be hugely difficult.
‘If the government were to take on a £100bn investment in this industry, this would need financing, and would increase overall cost of borrowing for overall debt,’ the research house says.
‘The government already has significant control over the industry and regulator, Ofwat.’
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