As we know, Will Hutton has many ideas about how the world should be run. There always seems to be something of a flaw with said ideas. Here it's that his basic assertion, that re-nationalisation can take place at no cost to taxpayers, which is simply wrong.
It seems impossible, but building on the proposals of the Big Innovation Centre’s Purposeful Company Taskforce, there is a way to pull off these apparently irreconcilable objectives – and without spending any money.
The government should create a new category of company – the public benefit company (PBC) – which would write into its constitution that its purpose is the delivery of public benefit to which profit-making is subordinate.
Public benefit companies aren't exactly new. One reasonable definition of them would include the East India Company. And the BBC in fact. And we'd note that the BBC's licence fee is, in law, a tax. Which means that this desire of getting the borrowing of such PBC's off the government books might not work.
But rather more importantly:
Because the companies would remain owned by private shareholders, their borrowing would not be classed as public debt. The existing shareholders in the utility would remain shareholders, and their rights to votes and dividends would remain unimpaired. So there would be no need to compensate them – no need, in short to pay £170bn buying the assets back.
The idea is that the current shareholders should receive no compensation. Yet look at what is being suggested. Their right to profit maximise is taken away by the new constitution of the company. There are other restrictions proposed as well by Hutton. Something of value is being taken from them - thus they should and must be compensated. This would be rather clearer under US law, where the concept of "a taking" is constitutionally established.
You might try to claim, as no doubt Hutton would, that this new set of restrictions is not a diminution of value. And yet he is arguing that it transfers value, that's his very argument for the change. Some value will move from shareholders to some more nebulously defined public interest as a result of the change. That's why Hutton is arguing for it.
It's thus a taking for the very reason that Hutton is arguing for it. Compensation must be paid.