Does Labour’s manifesto add up? Here’s a ConHome series to investigate – named, of course, in homage to the Shadow Home Secretary’s policing plan.

The Policy: Nationalise water

On page 19 of Labour’s manifesto, we read that “water bills have increased 40 per cent since privatisation”. Labour’s solution, on the same page, is to “Replace our dysfunctional water system with a network of regional publicly-owned water companies.”

The Problem: It would blow a massive hole in the already-uncosted ‘Transformation Fund’

Earlier this week we looked at the ‘National Transformation Fund’, which makes a nonsense of Labour’s nominally-costed £48.6 billion of new spending commitments by tacking an extra £250 billion onto their plans with no mention of where the money is coming from.

As water – and indeed, infrastructure generally – isn’t covered in the ‘costed’ sixth of Labour’s spending commitments, the funds for nationalising this vital utility must presumably be drawn from the NTF. But a look at the figures suggests this can’t be true.

The description of the NTF in Funding Britain’s Future breathlessly lists a wide range of capital projects, including several new railways, state-of-the-art energy production, universal super-fast broadband, not to mention research and development grants, which will be supported by the NTF.

But assuming that Labour don’t resort to expropriation without compensation, nationalising water would be hugely expensive: the Guardian reports that Ofwat, the regulator, estimates the industry’s capital value at £69 billion. That’s more than a quarter of the entire value of the NTF, just to change the ownership of a single utility.