The senior Cabinet member’s warning came as she unveiled a raft of measures to make the immigration system fairer and end the export of benefits, saving taxpayers at least £800million a year. The row over Labour’s plan to splurge more than £100billion on nationalisation programmes yesterday grew as it added BT to the list of companies it would bring into state ownership. Others include water, energy and rail firms.
Research carried out by this newspaper has revealed dozens of private pension funds for ordinary people have invested in these companies.
According to figures from Water UK, more than six million people invest heavily in the water industry via 67 pension funds.
Pensions are paid for from dividends in shares and property investments made by the funds.
Blue chip utility companies are a popular choice for investments because they are seen as stable.
But if water companies were to become nationalised, more than 155,000 members of the Mineworkers Pension Scheme would be affected, as well as 370,000 people in the Greater Manchester scheme for local authority workers and almost 135,000 members of the Merseyside local authority pension fund.
Jeremy Corbyn is planning nationalisation of utilities
More than 350,000 Tesco workers and 300,000 members of BT staff with private sector pensions would also be hit.
The BBC, British Airways, Church of England Investment Fund for Pensions and the superannuation scheme for lecturers would also be affected.
Ironically, the pension funds of the left-wing RMT union are heavily invested in BT, the energy giant SSE and National Grid.
When asked if Labour’s plans would risk impoverishing people who have saved for their retirement, Ms Coffey said “yes”. She pointed out that the Tory’s triple lock on the state pension has added £1,900 a year to its value since 2010, but would do little to help with the shortfall if private pension funds were hit by Labour’s nationalisation plans.
Ms Coffey said: “Corbyn and Labour somehow imagine that it is just billionaires who invest in utilities. But in reality it is ordinary people’s pension funds, people in the public and private sectors who have worked and saved all their lives.
More than 350,000 Tesco workers could be hit
“For me, this is classic short-term headline-grabbing from the [shadow chancellor John] McDonnell agenda.
“He thinks he is pulling out something which sounds very glamorous and we are just going to nationalise things.
“The majority of people who have pensions invested – whether they are public sector workers or not – will be investing in our FTSE100 companies, which include BT.” Ms Coffey also warned that the nationalisation of industries would also have an impact on investment in the UK.
She said: “This will scare a lot of investors who are taking all that infrastructure investment so we can spend more on our hospitals, schools and all the other elements of public sector services. It’s taking with one hand and taking away with the other hand as well.”
Water UK has said the industry needs to invest between £8billion and £10billion a year to ensure water quality and environmental performance. Northern Ireland Water – which is still nationalised – has only managed to raise enough money in three out of the last 12 years.
Meanwhile, Richard Hooper, chairman of the Broadband Stakeholder Group, has warned the Labour threat of nationalisation “would wipe out the existing and future investment plans” for super-fast broadband.
In a separate development, EU citizens will have to show they have a job before being able to live in the UK from 2021.
The proposals will come into effect after Britain’s departure from the EU as a result of the Conservatives’ £20million boost to strengthen border control.
EU citizens will not be entitled to benefits for five years either whereas now, they can automatically pocket welfare as soon as they arrive in the UK.
As part of the plans, exporting child benefit to other countries will also be banned.
Ms Coffey said: “Nobody should ever be coming to this country with the expectation that they are going to start getting benefits. Understandably, we are moving to a points-based immigration system from 2021.
Threat of nationalisation could ‘wipe out the existing and future investment plans’
“In essence, what we are saying is that every immigrant is going to be treated the same.
“If you are coming into the country then after five years – if you have basically settled, been here and made it your life – if you need help, we will help you.”
Ms Coffey’s comments came as Andy Burnham, the Labour Mayor of Manchester, urged his party to ditch freedom of movement from their manifesto.
Labour has also pledged to increase the living wage by 2024.
But Rishi Sunak, Conservative Chief Secretary to the Treasury, warned any extra gains would be lost in higher taxes.
He said: “Whilst we’ve been working to make sure you keep more of the money you earn, Jeremy Corbyn’s Labour would take the equivalent of a month’s extra wages from you after hitting you with higher taxes to pay for their spending splurge.”