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John McDonnell tells Labour conference nationalisation would cost taxpayer 'absolutely nothing'

John McDonnell outlined Labour's plans to nationalise public services. Credit: PA

Nationalising services such as the railways would cost the taxpayer "absolutely nothing", John McDonnell has said.

The shadow chancellor made the pledge after outlining Labour's plans to put public services "irreversibly in the hands of workers" so they can "never again be taken away".

He told a Labour gathering that public ownership was an "economic necessity" and not just a "political decision".

Mr McDonnell later told Sky News that the scheme would be "cost neutral" for the taxpayer.

Business leaders dispute the claim, arguing that it would cost billions of pounds.

Mr McDonnell said nationalisation would cost the taxpayer 'nothing'. Credit: PA

He told Sky: "It would be cost neutral because you would be bringing into public ownership an asset.

"In addition to that, you would not just have an asset - that asset would give you income.

"Instead of that income going to shareholders, it would come to the taxpayer."

Asked if public ownership would cost "absolutely nothing", he replied: "Exactly that.

"In fact we believe, because we would manage it more effectively and we would cut out the drain of resources by the shareholders, we believe we would be able to reduce customer prices and invest in the industry and make it more efficient."

Critics have warned nationalisation would cost billions. Credit: PA

Mr McDonnell earlier told his audience in London:"The next Labour government will put democratically owned and managed public services irreversibly in the hands of workers, and of those who rely on their work.

"We will do this not only because it's right, not only because it's the most efficient way of running them, but also because the most important protection of our public services for the long term is for everyone to have and feel ownership of them.

"We aren't going to take back control of these industries in order to put them into the hands of a remote bureaucracy, but to put them into the hands of all of you - so that they can never again be taken away.

"Public ownership is not just a political decision, it's an economic necessity.

"We'll move away from the failed privatisation model of the past, developing new democratic forms of ownership, joining other countries, regions and cities across the world in taking control of our essential services."