'A disaster for business' – City partners cite Corbyn as bigger concern than Brexit
Two out of three partners say possibility of Corbyn as PM is more of a worry than Brexit
November 13, 2018 at 07:40 AM
4 minute read
Two out of three City partners are more concerned about Labour leader Jeremy Corbyn becoming Prime Minister than they are about the impact of Brexit, according to new Legal Week research.
Legal Week's latest Big Question survey, which received more than 130 responses, found 64% saying they are more concerned by the prospect of a Corbyn-led government, compared to just 20% saying Brexit was a bigger worry, with the remaining 16% saying that they are equally as concerned by both scenarios.
One London head of a US law firm told Legal Week that a Corbyn government would be "an absolute unmitigated disaster" for the UK economy, "primarily because he places no value on what are arguably two of our most successful export industries – financial services and English law".
The Labour leader was also described as "a big black cloud hanging over the City", by one City private equity partner. "Corbyn will be one of the single biggest drivers of talent flight from the UK since the 1970s," the partner said. "His desire to include a retrospective wealth tax will lead to a brain drain – I can see no other outcome. When you add that to Brexit, it would accelerate the flight of talent from the City."
A number of other respondents echoed fears over a flight of talent, with one saying: "The UK will bounce back from Brexit – Corbyn will kill it." Another added: "Corbyn, though a decent man, would be a disaster for business in this country and would see a flight of talent."
Just 6% of respondents said they would prefer Corbyn to lead the country into Brexit, although current Prime Minister and Conservative party leader Theresa May only received the backing of 58% of respondents, with the remaining third (36%) saying they would prefer a new Prime Minister to take the reins.
"May is not the required Prime Minister to lead the country post-Brexit," one respondent said, "but a change of leader now would destabilise at a key time." Another added: "There should ideally be a change of leader, but not government – the last thing the country needs is the instability of another forced election."
One senior private equity partner told Legal Week: "Whatever your politics from a City perspective, Labour's view is much more interventionist. They talk openly about nationalising industries at no cost, when there is a very significant cost. Whatever you think about the value of that, the upheaval over time and the cost leads investors to think that will have a significant impact. That will drive interest from asset management funds away from the UK."
On the question of whether the uncertainty around Brexit is impacting their business, 82% of the respondents said that it was, including 27% who said it was having a 'significant' impact. Only 18% of respondents claimed that it was having no day-to-day impact on their work.
Earlier research by Legal Week this summer found that 75% of City partners were in favour of a second referendum, and last week 1,500 lawyers put their names to an open letter to Theresa May calling for a 'People's Vote' on the outcome of the Brexit negotiations.
However, despite this, 67% of respondents to the latest survey conceded that a second referendum was unlikely, with 15% saying there was 'no chance' of another vote. Just 16% of respondents said a second referendum was 'likely', with only 2% saying that it was 'very likely'.
Multiple respondents agreed that the result of the original vote should be respected, with one partner saying: "I am a Remain voter, but I think all parties need to recognise the vote that has taken place and the need to implement Brexit to reflect that vote. Having a repeat of the vote or trying to undermine the ability to deliver Brexit will only do irreparable harm to the country."
Nearly all of the respondents to the survey (91%) said they still expect Brexit to go ahead.
Another added: "A second referendum now would be madness. If it confirms Brexit, the Remainers must accept it. If it reverses Brexit, the Brexiteers will never accept it. Accepting the first result is the least worst option."
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