Power companies transfer ownership offshore to protect against Corbyn’s renationalisation – Daily Mail

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Power companies transfer ownership offshore to protect against Corbyn’s renationalisation – Daily Mail

Two of Britain’s biggest power companies have shifted the ownership of their businesses offshore to protect against the threat of nationalisation by a Labour government.

National Grid and SSE, who together own the country’s gas and electricity transmission networks, said they had started overseas holding companies in the wake of Jeremy Corbyn’s plans to bring them under state ownership.

The dramatic action comes after Jeremy Corbyn announced he wants to nationalise rail, water and electricity – as well as huge chunks of BT and potentially bits of Virgin, TalkTalk and Sky to provide free broadband.

Experts say the hard-Left offensive would cost hundreds of billions of pounds – but there has also been alarm on the markets as Labour insists Parliiament would set the price for seizing the firms.

That could hurt shareholders, including millions of ordinary workers who invest in such companies through their pension funds.  

Two of Britain’s largest power companies have transferred the ownership of their businesses offshore

SSE, which has a market value of almost £14billion, has shifted its UK business into a new Swiss holding company and National Grid, worth £30billion, has moved to subsidiaries in Luxembourg and Hong Kong, according to The Guardian

How much would the Labour nationalisation plans cost? 

Jeremy Corbyn has announced he wants to nationalise rail operating companies, water and sewage companies and energy supply networks.

Labour has not said exactly how it will go about the process, or given any cost.

But the CBI has estimated the initial bill would be £196billion. That is equivalent to about 10 per cent of the economy. 

The party has also said it would nationalise huge chunks of BT to create British Broadband, and offer everyone free internet access.

It suggests that would only cost £20billion, but BT says it would be at least £100billion.

Shadow chancellor John McDonnell has also admitted that parts of Virgin, TalkTalk and Sky would also have to be seized.

The sweeping programme has caused particular alarm on the markets as Labour insists Parliiament would set the price for nationalising the firms.

That could hurt shareholders, including millions of ordinary workers who invest in such companies through their pension funds.  

The decisions follow similar moves by two water companies Anglian and Yorkshire, and Severn Trent is believed to be contemplating a similar move.

The transfer would protect shareholders against any move to buy back the firms without paying full market value. 

SSE confirmed it moved its electricity distribution business, which supplies 3.7million homes in Britain, as well as its high-voltage electricity transmission network to a Swiss holding company.

It said in a statement: ‘SSE has incorporated in Switzerland a direct and wholly owned subsidiary company to acquire, oversee and hold investments or other financial assets.

‘The company has become the holding company for SSE’s electricity transmission and distribution networks through a share-for-share exchange. This is intended to support long-term investment in low-carbon infrastructure in SSE’s core businesses.’

The company said it was not benefiting from tax advantages with the move and it was consistent with their commitment to fair taxation.

National Grid connects local power companies in England and Wales with large stations by 6,000 miles of cables, and also owns the main gas transmission pipelines.

It said in a statement: ‘Labour’s proposals for state ownership of National Grid would be highly detrimental to millions of ordinary people who either hold shares in the company or through their pension funds – which include several local authority pension funds.

‘To protect their holdings, and in line with our legal fiduciary duty to our shareholders, we have established holding companies in Luxembourg and Hong Kong.’

National Grid also confirmed there was no financial benefit and the move was only to protect shareholders’ interests.

The two power companies hope the moves would force Corbyn to pay more to seize the assets if they carry out renationalisation.

They fear a Labour government would issue a compulsory purchase order on shares at a price below the market value and then offer shareholders low-returning government bonds as a compensation.

Hong Kong, Luxembourg and Switzerland have investment treaties with the UK which makes sure that investors are paid the market rate during a state buy-back.

Analysts claim that Labour’s renationalisation plans would have a negative impact on shareholders, particularly as both SSE and National Grid have delivered dependable returns. 

The Labour party said: ‘The idea that private owners, who have been ripping off the public, would move offshore in an attempt to prolong the rip-off illustrates just why we need the grid back in public hands.’

Jeremy Corbyn announced a radical manifesto in which he pledged to reverse a number of privatisations, including rail, water and electricity as well as BT’s Openreach division

‘They are in crazy town’: Jeremy Corbyn’s freebie-filled manifesto vows to spend £30 of taxpayers’ money for every £1 spent by the Tories in Boris Johnson’s manifesto 

Jeremy Corbyn was accused of being in ‘crazy town’ after it emerged Labour’s spending plans are 30 times bigger than the Tories’.

The Conservative manifesto sets out that the party would pump an extra £3billion a year into public services. 

That will be complemented by £3.6billion in tax cuts for low-paid workers and businesses, and paid for by delaying corporation tax cuts. 

But the figure is dwarfed by the Labour ticket, which would see an eye-watering £83billion more on running costs, funded by swingeing tax increases for the better-off.

The total day-to-day spending commitments of around £94billion from Labour is around 30 times bigger than the £3billion from the Tories

Shadow chancellor John McDonnell also dramatically revealed yesterday that the party will hand another £58billion in compensation to so-called ‘WASPI’ women born in the 1950s who have seen their pension ages increased.

That adds another £11billion a year to spending over the next five years. 

The total commitments of around £94billion from Labour is around 30 times bigger than the £3billion from the Tories. 

Mr Corbyn also plans to introduce a four day working week – which experts have warned could leave the NHS with a massive staffing bill. 

And he has mooted a £400billion infrastructure ‘transformation fund’, nationalising a swathe of industries – including providing free broadband for everyone – and scrapping the state pension age increase. 

By comparison, the Tories propose extra capital spending of around £100billion over the Parliament.  

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