Renationalisation plans not 'a return to the past'

By Alan McGuinness, political reporter, in Liverpool
John McDonnell has hailed Labour's plans to renationalise the water industry, telling the party's conference it is part of "the greatest extension of economic democratic rights that this country has ever seen".
The shadow chancellor told Labour's annual gathering in Liverpool that the policy would "put this essential service back in the hands of local councils, workers and customers".Mr McDonnell said the party's plans for sweeping nationalisation of industries like water, energy and rail would not be "a return to the past" but the catalyst for genuine change.

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"We don't want to take power away from faceless directors only to centralise it all in a Whitehall office, to swap one remote manager for another," he told delegates.He said the party was primed to implement a radical programme of nationalisation as soon as it entered Downing Street.Mr McDonnell told the hall Labour would ensure there would be "unprecedented openness and transparency" in how the water industry was managed, as well as announcing a "large scale consultation" on "democracy in our public services".
McDonnell: 'Power comes from ownership'
Mr McDonnell said an industry shake-up would see it reorganised under new Regional Water Authorities (RWAs).These would include local councillors, worker representatives and representatives of community, consumer and environmental interests.He said executive and director level jobs would be re-advertised on "dramatically reduced" salaries and denounced the "scandal" of an industry which has paid out €18bn in dividends as bills rocketed by 40% in real terms.As for what would happen to shareholders in the existing private companies, Mr McDonnell said they would be compensated with bonds in a way that would be "cost neutral" for the taxpayer.

CBI: McDonnell has the right idea but the wrong method
However, the party has made clear that shareholders' payments could be cut if there is evidence of asset-stripping, pension fund deficits or state subsidies since privatisation - and compensation being forfeited altogether has not been ruled out.Mr McDonnell promised: "We are ending the profiteering in dividends, vast executive salaries, and excessive interest payments."Surpluses will be reinvested in water infrastructure and staff, or used to reduce bills."Mr McDonnell said a Public and Community Ownership Unit in the Treasury would take charge of the return of water, energy, rail and the Royal Mail to public ownership.
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