An argument is being made that nationalisation of everything would be a good idea. Hmm, the idea of Owen Jones running the utilities does not exactly excite, it has to be said. But let’s assume that it’s not going to be a disaster. OK. So what price should Labour be paying for these assets?
A sound economic approach would be to return to shareholders the money they had actually invested in the companies – the “book value” of their equity, a total of £56bn – without providing any public money to preserve any of the current excessive returns.
And there we have it, the plan is to steal your money. Because the only correct value of anything is what someone is prepared to pay for it – the market value.
Let us run this the other way around. Chelsea Barracks was sold off as a development site for £959 million. The acquisition cost was whatever it was in the 1860s when the site was first developed as a barracks. So, what’s the correct price for selling that land? The market price or the book value of the equity, that 1860s purchase price?