Two of Britain’s biggest power firms move business abroad to protect against Labour’s plans for nationalisation

TWO of Britain's biggest power companies have moved their businesses abroad to protect themselves from the threat of nationalisation by a Labour government.

Both National Grid and SSE, which together own the UK's transmission networks for gas and electricity, have started overseas holding companies after Jeremy Corbyn announced plans to make them state-owned if he wins December's election.

Under the plans, Parliament would set the price for taking over the firms, which could be detrimental to shareholders including the millions of ordinary workers who invest through their pension funds.

National Grid has started holding companies in Luxembourg and Hong Kong, while SSE has turned to Switzerland for protection.

Both firms say that the move adds no financial benefit to business but hope it will force Corbyn to pay more to nationalise the companies.

This is because all three countries have investment treaties with the UK that ensure investors are paid the market rate in the case of a take over by the state.

They worry that remaining in the UK would allow a Labour government to force a sale lower than market value and offer shareholders low-returning government bonds instead.

National Grid, which is worth £30billion, owns main gas pipelines and connects local power companies with larger ones in England and Wales with 6,000 miles of cables.

A statement from the firm read: "Labour's proposals for state ownership of National Grid would be highly detrimental to millions of ordinary people who either hold shares in the company or through their pension funds – which include several local authority pension funds".

It specified that the move won't see it benefit from any tax advantages and is purely to protect shareholders from potentially unfair government prices.

A statement from the supplier said: "In practice, SSE expects that precedent, the principle of fairness and the need to secure future investor confidence in the UK economy means it should be possible to secure fair value from nationalisation for the electricity networks businesses without recourse to treaty protection."

Experts have warned that nationalisation of the powerhouses would be "extremely costly to the British public" and some have even warned if will lead to frequent blackouts.

"Under state ownership the energy networks were more expensive and less reliable," said David Smith, chief exec of trade body Energy Networks Association.

"Since privatisation in 1990 network costs to the bill-payer have fallen by 17 per cent.

"At the same time that costs have fallen, reliability has improved: the public have experienced 60 per cent fewer power cuts while their length has been reduced by 84 per cent."

Rail, water, electricity and broadband would all become controlled by the state under Corbyn's £65billion nationalisation plans.

A recent study by economic consultants NERA found that they will leave every household in the UK could end up £1,000 out of pocket.

A spokesperson for the Labour Party told the : "The UK’s energy networks are vital strategic infrastructure on which we all rely.

"You cannot boil a kettle, heat your home or run a business without the grid.

"The idea that private owners, who have been ripping off the public, would move offshore in an attempt to prolong the rip-off illustrates just why we need the grid back in public hands."