There seem to be lots of British businessmen – or businessmen who do business in Britain – who don’t care for the prospect of a Government led by Labour leader Ed Miliband – and not just because of his nasal tones.
Alliance Boots boss Stefano Pessina ramped things up a week or so ago by saying a Labour government would be a “disaster” although Pessina – an Italian-born tax exile who lives in Monaco and moved Alliance Boots’ tax domicile to Switzerland – seems rather taken aback by all the fuss, getting his spinners Finsbury to send out a belated note claiming that he was quoted “out of context.” Dear oh dear.
“It’s a conundrum for business. Labour won’t have a referendum (on membership of the EU) but you might have a regime that is more negative to business, and a referendum makes a Conservative vote that much more difficult.”
SMS seems to have got it in one. In recent times Labour (under Tony Blair and Gordon Brown) has been rather good for business; too good many would say as Brown’s ‘light touch’ regulatory regime helped to fuel the bank over-leveraging (as they say in the Square Mile) that made the financial crisis of 2008 rather worse for the UK than most other countries.
Miliband clearly takes a different view but so far he’s only made what amount to vote-catching noises. Is it really so bad to threaten the energy companies over their prices? The so-called ‘Mansion Tax’ on houses worth over £2m will almost certainly be watered down if Labour gets into power. There’ll be further bands of council tax on valuable properties instead (which after 20 years without them while prices have shot up is hardly unreasonable). The proposed return to a 50 per cent top rate of tax is silly because it will just encourage even more tax avoidance.
Tory leader David Cameron, on the other hand, is ‘leading’ a party in which a sizeable minority are ideologically anti-EU and closer to the views of UKIP than mainstream Tories are. Cameron is likely to promise a quick in/out referendum on the EU as early as 2016, which gives him (or his successor) precious little time to ‘renegotiate’ the UK’s relationship with the EU. Angela Merkel, Francois Hollande and co. have other things on their mind (Greece, low or no growth in the EU economy, Ukraine). They may well decline to help out Cameron.
Sorrell knows which one he prefers and it’s not a government that pulls Britain out of Europe. Like most business people he feels instinctively happier with the Tories than Labour but he knows on which side WPP’s bread is buttered: the company only does about ten per cent of its business in the UK. A Britain that’s out of Europe would be a strange place to base an international services business. It would be far more logical to relocate WPP to New York.
Which is not the legacy Sorrell wishes to leave behind.