Christopher Furlong/Getty Images
Even Karl Marx would have choked on his cornflakes at the sheer scale and effrontery of Jeremy Corbyn’s plans for a socialist revolution if Labour comes to power.
A new analysis by lawyers, Clifford Chance, together with the Financial Times newspaper, of Labour’s proposals show that the extent – and the cost- go far deeper than anyone has so far dared to suggest.
Clifford Chance estimates that Labour’s flagship proposal – known as the inclusive ownership funds – to hand workers shares in the UK’s largest companies would amount to £300 billion alone.
If so, this raid would be the biggest and most astonishing expropriation of private wealth by a socialist government ever seen in the West, and a practice usually associated with tin pot dictatorships like those in Venezuela and Cuba.
Clifford Chance and the FT have run the numbers over McDonnell’s tortuous ‘inclusive ownership funds’ using data from the Office for National Statistics.
This is based on ONS estimates that financial and non-financial corporations carry a book value of £5.5tn. Although there are no precise numbers, roughly over half of all corporate turnover comes from these large companies – are ones with over 250 employees.
Working from that 57% figure, they arrive at the value of ’large’ private sector companies being £3 trillion and taking 10% of that is how they get to the £300 billion number.
Labour’s plans, which were drawn up by John McDonnell, shadow chancellor, are for the government to seize ownership of shares of 10 per cent of the shares in 7,000 companies which have more than 250 staff.
This outrageous raid – which I have argued before amounts to theft and could prove to be illegal – is for the state to transfer 1 per cent of shares from shareholders to workers over 10 years.
The transferred share would be managed by employees, who would collect dividends up to £500 a year. But any income after that amount, would go to the Treasury.
It’s a mad proposal, and one that is all but a stealth tax in name. It is also deeply flawed because such a plan would not give workers wider share ownership – as they would not have the right to buy and sell their shares – and which ostensibly is the point of the exercise.
So there you have it. That’s plan number one costing a cool £300 billion.
The second is even more explosive: Labour is also aiming its fire on Britain’s 2.6m landlords. McDonnell has said that Labour now plans a “right to buy” scheme for private tenants – and higher taxes on landlords.
The shadow chancellor is determined to get rid of the huge ‘buy-to- let’ market, and find solutions to the housing crisis. It is estimated that about 40 per cent of all council houses are now rented out by private landlords.
McDonnell is right about the housing problem. But here’s a not so original policy idea: a fairer, better and more productive one. Build more council houses. We need them desparately: since the 1980s, the number of council homes has dropped from 6.5m to 2m.
Yet again, this is another nonsense policy. It’s also expropriation, and a proposal that will also cost squillions and is also illegal. Once again, Labour is dressing up fairness with smoke and mirrors.
These latest numbers from Clifford Chance are but the tip of the Marxist iceberg. They come on top of the estimated £100bn plus figure to cover the cost of Labour’s plan to renationalise key parts of industry. At the latest count, these included rail, the Royal Mail and energy companies ranging from water to the National Grid. Even that figure for compensating shareholders looks on the low side. But it could be even lower because if Labour has its way, it is threatening not to pay the market price.
Indeed, McDonnell has said publicly and shamelessly that parliament would decide an appropriate ‘discounted’ price. That too would amount to theft, and is also illegal.
Many overseas investors in utility companies such as water and energy are already talking to their lawyers about what would happen in the event of a Labour government to their UK investments. And you thought Brexit was putting off investors.
Infact, the only people to benefit from Labour’s deeply damaging plans looks like being the thousands of lawyers who will be employed fighting the millions of claims and counter- claims that such policies will lead to.
By far the more damaging consequence will be that foreign investors will not want to invest in the UK when they don’t know whether they will own what they are buying or not.
Paradoxically, the smart Brits have already moved their riches overseas months ago in fear of a potential Corbyn government. The rich always find ways of protecting themselves.
It’s good news that the extent of how much Labour’s socialist proposals will cost the state are at last being scrutinised. Just wait until the public discovers what Labour plans to do with inheritance tax. I’m told that Labour’s top team are still arguing about the extent of the plans to grab the little that parents are able to leave their children. When that’s out, hear the man and woman in the street squeal.