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Perhaps unsurprisingly, Labour’s plan to nationalise the country’s energy network isn’t popular with the companies’ management.
But another problem could be Labour’s reported proposal to pay less than market price by subtracting state subsidies the firms have benefited from.
“There’s been numerous small nationalisations and about 15 sizeable nationalisations since the war,” says Dan Neidle, a partner at law firm Clifford Chance.
This includes railways, gas, Cable & Wireless Communications, the Bank of England, coal and electricity, each one was bought by the state at market value, he says.
Can Labour determine market value? “That’s not what the UK precedent is and that’s not what international law says,” he says. The stock market tells you what market value is for listed companies, he adds.
There is scope for debate, he says, but various court cases suggest getting a discount won’t go the way of any future government.
“The courts have never said that’s acceptable,” he said. “You have to look quite hard for governments that have done that,” Venezuela is a rare example of a state that has done it, he says. If the UK did this it might struggle to raise money in the bond market, he suggested.
“Speaking for myself, I don’t believe it. I cannot see the UK turning itself into Venezuela, being sued across the world by irate investors particularly at the same time as the government is trying to raise money in the international bond markets.” Civil servants will advise against it, he thinks.