Corbyn’s Labour leadership win could damage Britain’s pro-business reputation
Jeremy Corbyn’s Labour leadership victory will be a major issue for global investors and detrimental to Britain’s pro-business standing.
As I was quoted as saying in The Sunday Times, The Express, Daily Mail and Your Money amongst others, the Islington North MP’s staunch hard-Left socialist views go against the ‘Britain is open for business’ message, and could seriously affect the UK’s enviable business reputation.
Why? Well Corbyn appears set on dragging the country right back to the 1970s; a period of high taxes and an inflexible labour market, as I was cited as saying in the Daily Mail, International Business Times and Yahoo News. Should he believe this is the way forward in today’s global economic environment, then perhaps he should focus on the first few years of Hollande’s presidency in France!
The new Labour leader could also look at other countries which benefit from a strong economy without ‘soaking the rich’, as his so-called ‘Corbynomics’ approach of imposing massive tax hikes in order to pay for substantial increases in public spending could indeed backfire in a spectacular way.
If indeed taxes are increased by such a huge amount, and work and investment is discouraged, then individuals will inevitably change their behaviour.
As such, those who have the resources to do so will move to another jurisdiction with lower taxation, meaning the government’s coffers would inevitably bear the brunt.
These people are Britain’s wealthiest; they are job/wealth creators and investors who also greatly support the Revenue with hefty UK income tax receipts and spending.
Coupled with this is the fact that tax hikes will make Britain far less attractive as a work choice for talented, career-driven individuals, which again means a drop in tax revenue.
Consequently, in recent times, global investors have been scrutinising the political landscape in Britain, and this will be increased further following Jeremy Corbyn’s victory.
Therefore, to my mind, in order to secure Britain’s long-term economic growth, supply-side reforms are needed, as well as a continued place in the EU, macroeconomic disparities need to be levelled out and a strong, advancing policy on immigration must be executed.
Demanding more taxes from the country’s richest is certainly not the answer.